The Child Tax Credit checks are being mailed out across the United States on July 15, 2021. These payments will be available to around 39 million families.
Many families are already benefiting from the advance payments. The money has been distributed in a variety of ways.
Some families received their money directly deposited into their bank accounts, while others got paper checks.
However, some families have yet to receive a response from the Internal Revenue Service (IRS). Others have chosen to opt out of these advance payments to collect all of their 2021 Child Tax Credits at once.
The IRS maintains a Child Tax Credit updating portal where people can verify their registration and eligibility for these payments. If individuals prefer to get a single full credit when completing their 2021 tax returns, they can opt-out of the advance payments.
How does the Child Tax Credit work now?
A tax credit lowers your tax payments. The redesigned Child Tax Credit for 2021 is more beneficial than the previous one. It widens eligibility and has begun a partial distribution through advance payments from July 15, 2021. The changes made by the American Rescue Plan Act of 2021 are in effect for the 2021 tax year. The IRS began delivering letters to qualifying families during the month of June.
The Child Tax Credit is also wholly refundable. If you have no income or owe no income taxes, you can receive the full benefit. Previously, only $1,400 was refundable. The 2021 changes eliminate the criteria for earned income. This allows older persons who rely only on social security, pensions, or IRAs to qualify for the credit if they have dependent children or grandchildren aged 17 or younger.
Unless they opt out, most eligible families will receive advance payments automatically. But those who were not required to file a tax return this year will need to take action to receive the money.
Are you eligible for the Child Tax Credit?
There are a few criteria to qualify for the Child Tax Credit:
- You should have a child under the age of 18 by the end of 2021
- You have claimed the Child Tax Credit on your 2020 or 2019 tax return.
- You spend at least half of 2021 in the United States.
- You need to submit a joint return with a spouse who spends more than half of the year in the United States.
What do you need to do to get the Child Tax Credit?
The IRS launched a portal on June 14, allowing non-filers to register for the new credit. Families who don’t file taxes because they don’t make enough money can now sign up to receive the benefit if they have eligible children.
According to the IRS, you don’t have to do anything right now. For people who haven’t filed taxes for the previous year, the government will use 2020 tax filings or 2019 returns to determine their eligibility.
The IRS began mailing 36 million letters to families who may be eligible for the credit and monthly payments in early June. You can update any changes through the IRS portal.
When will you get the next payment for the Child Tax Credit?
Don’t panic if you haven’t received your first payment. You will receive your money eventually if you qualify for the payments.
This year, you won’t get the total amount of the Child Tax Credit.
You can receive half of the money (up to $1,800 per child) in monthly installments when you file your taxes in the next year, 2022.
Until then, you’ll receive six smaller installments over the year.
The aim of “advance payments” is to provide you money sooner to pay for things like rent, food, and child care.
CHILD TAX CREDIT PAYMENT SCHEDULE
|July 15, 2021: First Check|
|Dec. 15: 2021: Last check|
|April 2022: Second half of payment|
What will be the Child Tax Credit amount in 2021?
According to the new legislation of 2021, the Child Tax Credit is also available for parents of 17-year-olds.
The maximum amount per child has been increased from $2,000 to $3,600 for children under 5 years.
The amount has been increased to $3,000 for children between the ages of 6 and 17.
This benefit is also available for low-income taxpayers to claim the total amount of the credit.
This group also includes those who do not earn a living.
Is it possible for you to opt-out? What happens if you do?
You can opt-out of receiving the monthly payments. For this, you need to opt-out through the IRS webpage. If you opt-out, you will not receive the monthly payments, but you will receive the entire credit when you submit your taxes in 2021.
You can consider this option if you don’t need the monthly payments now, taking advantage of the huge lump sum of money as a tax refund.
|Payment month||Non Enrollment deadline|
How do you make sure you get the money?
People with other sources of income, such as social security, supplemental security income, pensions, or IRAs, who have a dependent child or grandchild, are eligible in 2021 for the Child Tax Credit. Usually, they fall into that category and don’t need to file a return due to low income.
But, they should take action to receive the advance payments. People who don’t need to file a return because their income was too low or non-taxable need to use the IRS’ non-filer tool to claim stimulus payments. This helps them to receive the Child Tax Credit payments.
The Biden Administration is trying to extend the tax credit beyond 2021. It is expected that the monthly payments will increase for five more years.
This benefit will help families to sustain themselves. Most of them have left the workforce during the pandemic. This money can help parents to pay for necessities like child care, groceries, school supplies, and additional needs that come along with raising kids.