Payment of the child tax credit begins this Friday

How much will families receive in child credit?

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(CNN) -

Millions of families should soon receive their fourth payment of the enhanced child tax credit, which the Internal Revenue Service (IRS) will distribute on Friday.

About $ 15 billion was sent to about 35 million families last month.

The average payment for parents was $ 428.

Most parents automatically get the enhanced credit of up to $ 300 for each child up to age 6 and $ 250 for each child from age 6 to 17. The IRS is scheduled to send two more monthly payments in 2021.

• ANALYSIS |

  The child tax credit is the government's biggest benefit since Social Security, but only for one year

But the agency has also had trouble getting the funds to some households, particularly the poorest families, even though it has made multiple efforts to connect with them and set up a portal so they can provide the information necessary to receive the credit. .

Low-income households may not receive payments if they did not file their 2020 or 2019 tax returns or if they did not use the IRS tool to claim their coronavirus stimulus checks.

Up to 2.3 million children could be in families that have not filed recent returns, according to the Treasury Department.

High food prices due to supply chain crisis 3:04

About 13% of eligible low-income households have not received the first two monthly payments and were not sure how to claim them or did not know why they were not receiving them, according to a recent survey by the University's Poverty Solutions initiative.

from Michigan.

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The survey examined 3,000 families with children under the age of 18 who use a mobile app created by Propel, a technology company, to manage their food stamp benefits.

Parents who responded to the survey in Spanish were less likely to say they received child tax credit (CTC) payments in July and August than those who responded to the survey in English.

This, along with other findings, suggests that more outreach to Spanish-speaking households is needed, Poverty Solutions found.

• Monthly Child Tax Credit Payments May Bring Nasty Tax Surprises Next Year

"It is important that we take additional steps to ensure that the CTC reaches out and supports all eligible children and families who can benefit from this important investment," said Natasha Pilkauskas, co-author of the survey analysis and associate professor at the University of Michigan. .

The first two child tax credit payments lifted 3.5 million children out of poverty, according to a recent estimate from the Center on Poverty and Social Policy at Columbia University.

The child poverty rate was 11.5% in August, but it would have been 16.2% without the improved credits.

The down payments also led to a 25% decrease in food insufficiency among low-income families with children, the center estimated.

• The first child tax credit payments were sent.

  This is what you should know

About 75% of low-income families said they used the additional funds to pay bills, Poverty Solutions found.

About 14% reported using the money for school supplies and 11% spent it on school clothes or uniforms.

The enhanced child tax credit, which was created as part of the $ 1.9 trillion coronavirus relief package in March, is in effect for 2021 only.

The Democrats' $ 3.5 trillion budget reconciliation package seeks to extend the credit through 2025 and make it fully repayable on a permanent basis.

However, these provisions could be at risk as lawmakers seek to lower the cost of the bill.

Are you eligible for the child tax credit?

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Here's what you need to know about the enhanced child tax credit

Who qualifies?

The full enhanced credit will be available to heads of households earning $ 112,500 and joint taxpayers earning up to $ 150,000 per year, after which it begins to phase out.

For many families, the amount stabilizes at $ 2,000 per child and begins to be phased out for single parents earning more than $ 200,000 or for married couples with incomes greater than $ 400,000.

More low-income parents will also be eligible for the child tax credit because the March aid package made it fully refundable.

It had only been partially repayable, leaving more than 26 million children unable to get the full credit because their families' incomes were too low, according to Treasury Department estimates.

About half of black and Latino children, as well as children living in rural communities, received only partial or no credit due to their families' low incomes prior to the upgrade, said the Center for Budget and Policy Priorities ( CBPP), left-leaning.

Non-citizen parents can receive payments from their citizen children as long as they have an individual taxpayer identification number or ITIN and their children have a Social Security number (SSN).

Families can verify their eligibility through this IRS website.

How much money do you get?

That depends on your household income and the size of your family.

Eligible households can receive a total of up to $ 3,600 for each child under age 6 and up to $ 3,000 for each age 6 to 17 by 2021. This is an increase in the regular child tax credit of up to $ 2,000 for each child up to 17 years of age.

Child tax benefit: who will receive it and when?

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When will you receive the credit?

Parents will receive half of their credit monthly for the remainder of the year.

Payments will be made on the 15th of each month, unless it is on a weekend or holiday.

The other half can be claimed when you file your 2021 taxes next year.

Parents can check to see if they are signed up to receive advance payments on an IRS portal.

They can also use it to provide or update their bank account information.

Those who don't receive their monthly payments until later in the year will receive half the credit in 2021.

Families who wish to receive payments in one installment can choose not to receive monthly payments on the IRS portal.

Some parents may not want to receive monthly payments, especially if their income increases this year.

The payments are credits toward families' 2021 tax liability, but are based on 2020 or 2019 household size and income. So some people who get the credits early could end up getting much smaller refunds — or even owing taxes — when they complete their 2021 returns.

Legislators, however, protected lower-income parents from potential overpayments.

Householders earning $ 50,000 or less and joint taxpayers with income of $ 60,000 or less will not need to repay any overpayments.

Do I have to do something to get it?

The vast majority of families obtain the credit automatically because they filed their 2019 or 2020 tax return claiming the credit.

The IRS also sends payments to Americans who previously used its portal to sign up for stimulus checks.

But families who have not recently filed tax returns or who have not used the Unfiler Tool should take action.

They can use another IRS portal to register and receive the enhanced child tax credit.

The registration tool allows users to provide the necessary information about their homes and, if they wish, their bank accounts so that the agency can deposit the funds directly.

Parents can also go to GetCTC.org to file their simplified tax return and claim the enhanced credit.

The site, which launched in September, was developed by the nonprofit Code for America, in collaboration with the White House and the Treasury Department.

It is available in English and Spanish.

The IRS portal has been criticized because the tool is only in English and does not work well on cell phones.