The IRS has confirmed monthly payments from the new Child Tax Credit will start in July.
The payments, part of President Joe Biden’s $1.9 trillion American Rescue Plan, allow families to receive a $3,000 annual benefit for each child age 6-17 and $3,600 for each child under age 6. The payments will be made in monthly $250 or $300 per child installments starting in July and running through December. The remainder can be claimed as a credit on 2021 taxes when they are filed 2022.
There will also be a $500 total payment for dependents who are 18 and for full-time college students between 19 and 24 years old, CNET reported.
Previously, the Child Tax Credit was available for parents with an Adjusted Gross Income of $200,000 or less for single filers or $400,000 or less on a joint return. Under the new plan, individuals earning $75,000 or less and married couples earning $150,000 or less will qualify for the full amount of monthly payments per child. The payments will start to phase out above those levels with the $400,000 and $200,000 caps still in place. AGI will be determined by 2019 or 2020 tax filings.
Families who aren’t eligible for the higher payments due to income will be able to claim the regular tax credit of $2,000, minus any payments they received, as long as their income remains below the $200,000 for single and $400,000 for individual thresholds.
The IRS said it is establishing a portal by July 1 that will allow people to check their status and facilitate payments. The portal can also be used by those who chose to opt out of the monthly payments.
CNET has a calculator to help you determine how much you could receive. You can see that here.
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April 16, 2021 at 12:00PM
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