Child Tax Credits Head Out To Millions Of Families This Week
PITTSBURGH (KDKA) - This is the week that millions of American families will start to get a monthly deposit or check from the Internal Revenue Service based on the number of minor children in their household.
It's part of President Biden's American Rescue Plan approved by Congress last March.
The United States has had a child tax credit for years, but this one is different because starting July 15 families will receive a cash advance for a tax credit they would normally get in spring 2022 when they file their 2021 tax returns.
"The advanced and enhanced child tax credit has the IRS sending checks from mid-July to mid-December -- six months' worth of checks to millions of families who stay with the advanced child tax credit," Raphael Tulino, an IRS spokesperson, told KDKA money editor Jon Delano.
Families will get this advance of a monthly check for six months without doing anything, and for this pandemic year only, the credit is higher than usual.
For children under 6 years of age, eligible parents will get $300 per child per month for the next six months. For children from 6 to 17, parents get $250 per child each month.
What families are eligible for these payments?
Single parents earning up to $75,000 a year, heads of households earning up to $112,500 per year and married couples earning up to $150,000 annually are all eligible for the advanced child tax credit.
The IRS is using the last tax return you filed to determine eligibility and the number of dependent kids.
If your income does not require you to file a federal tax return but you have dependent children, you need to let the IRS know that in order to get these monthly checks.
"A lot of folks don't have to file a tax return, but we're going to need this information, and they're going to use this non-filer tool if they want these advanced payments throughout the year," says Tulino.
Not everyone may want this advance payment now. Some prefer a bigger refund next spring.
One warning: if your 2021 income goes over the limits, you may end up having to give some money back.
"If you did get this credit based on a 2019 or 2020 return, you do need to be careful because your 2021 information may be significantly different," says Professor Bryan Menk, a tax professor at Duquesne University. "The government will get that money back if you are not eligible and receive that payment."
The IRS does have a way to opt out of the advanced payments.
"If you don't want to receive these payments and that's ok for many, then you want to opt out sooner rather than later," says Tulino.
It's too late to opt out for the July check but not too late for the rest of the year.
