Monthly child tax credit payments will start going out July 15. Here’s what to expect. – About Your Online Magazine


Families of more than 65 million children will start receiving improved child tax credit monthly payments of up to $ 300 on July 15, the Biden government announced on Monday.

The temporary benefit, which will be sent to 39 million families and covers 88% of children in the USA, comes from Democrats $ 1.9 trillion coronavirus rescue package. The vast majority of families will receive the funds through direct deposit, while the rest will receive checks or debit cards in the mail.

The IRS will send payments on the 15th of the month, unless it falls on a holiday or weekend, until December. Qualifying parents will receive $ 300 per month for each child under the age of 6 and $ 250 for each child between the ages of 6 and 17.

To reach low-income families who do not normally report taxes, the agency is creating a portal to allow them to submit their information. This will allow them to claim both the improved child tax credit and the stimulus payments they may have missed. ONE similar online form existed last year to allow low-income Americans to receive the first round of stimulus checks from the March 2020 relief package.

In the meantime, the IRS will also launch a separate portal to allow parents to update their address, bank account information and family size, as well as to opt out of receiving monthly payments in favor of receiving the tax credit as a lump sum next year. year when they make their return.

More details about the portals will be announced in the coming weeks, said a senior government official. Management also plans to launch an outreach campaign to inform families about improved payments and portals.

A bigger boost for a year

Under the American Redemption Plan, families can receive a total credit of $ 3,600 for each child under 6 and $ 3,000 for each under 18 in 2021. This is an increase over the current credit of up to $ 2,000 per child under 17 years. the credit will be available to single parents with an annual income of up to $ 75,000, heads of households who earn $ 112,500 and joint registrars who earn up to $ 150,000 per year.

The package also makes the tax credit fully refundable so that more low-income parents can enjoy it. So far, it has only been partially reimbursable – leaving more than 20 million children unable to obtain full credit because their families’ incomes are very low.

Lawmakers also wanted to make it easier for parents to use the funds to cover their expenses during the year. Thus, the law provides for the monthly sending of half of the credit to families, from July to December. They will then claim the other half in their 2021 tax returns.

Initially, the IRS was uncertain whether he would be able to provide credit monthly starting in July, but Commissioner Charles Rettig told lawmakers last month that the agency is on track to meet that deadline.

Only the improved child tax credit is expected reduce child poverty almost in half. In total, the Democrats’ aid package was designed to reduce the proportion of children in poverty by more than half, lifting more than 5 million children out of poverty this year.

Democratic lawmakers have been lobbying the Biden government to make reinforced credit permanent, but President Joe Biden’s last proposal, the American Families Plan, would only continue with the increase in payments until 2025. The plan would make the credit fully refundable permanently.

The provision is projected to cost about $ 110 billion a year.

***



Paula Fonseca