On Your Side: Q&A for child tax credit payments
SPRINGFIELD, Mo. (KY3) - Next month those child tax credit payments should start hitting bank accounts for families who qualify.
You’ll get $250 or $300 a month per child, depending on their age.
The IRS will send letters to more than 36 million Americans eligible to receive monthly child tax credit payments. As part of the American Rescue Plan Act signed in March, the government expanded the child tax credit. And you can get part of it in advance instead of waiting for the credit when you file your taxes.
The child tax credit you normally receive filing your taxes was up to $2,000 per child. The credit increased to $3,000 per child or up to $3,600 for children under age six. The IRS plans to send eligible families advanced payments, starting around July 15. You would receive up to $250 or $300 a month per child, depending on the age of the child. To get the payments, you must have either filed your 2019 or 2020 federal income tax return or used the non-filers tool on the IRS website to register for an economic impact payment. The payments phase out for married couples earning more than $150,000 or singles who make more than $75,000.
If you are eligible, you do not have to do anything to receive the payments. You will have the option to opt out of the advance payments. If you choose that option, it doesn’t mean you don’t get the tax credit.
If you have a new addition to your family in 2021 Uncle Sam needs to know. Head to the Child Tax Credit Update Portal on the IRS website. Soon, you’ll be able to update your info like mailing address, bank account info, change of income and martial status. For divorce and custody situations, nothing changes.
“If they’ve been in that situation for a while, then they generally know who normally could claim the child. And they will continue to follow those rules, because that has not actually changed with this new legislation. For those people who are going through a divorce. That’s a little bit more of a question. And that’s something typically they work out and settle with their attorneys,” said Tiffany Cossey, with Drury University, Professor of Accounting.
Also in the portal, you can unenroll or opt out of getting the six payments. If you are making significantly more this year compared to last, consider it.
“If you have a taxpayer who is making more in 2021, at the end, it would be enough to reduce their child tax credit, then there could be a situation where they end up owing some money back to the government,” said Cossey.
Review your budget. You might be underwhelmed with your 2021 refund.
“They just need to understand that if they’re getting it now, it truly is an advanced payment toward that credit, their final refund in the spring will be lower,” said Cossey.
The first round of payments start July 15. Scammers know that and will try to steal your money. Remember, The IRS will not cold call you, email you or contact you on social media.
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