How To Make Sure You Get Child Tax Credit Payments
In conjunction with the American Rescue Plan Act of 2021, the IRS is advancing families with children half of their Child Tax Credit during the second half of 2021. These advancements are intended to help ease the financial burden caused by the Covid-19 pandemic.
How Much Can You Get?
The IRS began sending the disbursements out in July 2021, and the monthly payments will continue through December. They then will send out the remaining half in April 2022. Qualifying filers can receive up to $3,600 (up to $300/month) for children under six and up to $3,000 (up to $250/month) for children ages 6 to 17.
Alternatively, eligible families have the choice to opt-out. If they do this, they can instead claim their full credit eligibility when filing their taxes for 2021.
Take Advantage Before It’s Too Late
According to the IRS, they paid over $15 million to roughly 61 million eligible children’s families in the second round of payments in August. That was approximately $1.6 million children more than received the July disbursement.
Families who missed this news can register through the IRS website to receive the past and upcoming payments in larger installments over the remaining months of 2021. Unfortunately, the August 30 deadline to sign up for these subsidies to begin in September has already passed. Filers who missed that deadline have until October 4 to register to start receiving disbursements in October. If that deadline is missed, eligible families will have to file a tax return next year to claim the credit in full.
What Are The Qualifications?
Eligibility requirements for households include income limits. Single parents must make less than $75,000 to qualify. Couples must earn $150,000 or less.
It is important to note that families also must file taxes to collect. For some low-income families that have not been required to file, this might be their first time. The IRS has provided a “Child Tax Credit Non-filer Sign-up Tool” to help.
Families using this tool will need to provide specific information. This information includes valid social security numbers for the entire family, the Identity Protection PIN that the IRS provided them (if applicable), and banking information to receive payments (if applicable). The tool will determine eligibility, and the families need not do anything further to receive their payments.
The IRS website notes that some advancements were sent by mail in August instead of directly deposited. Families missing that August installment, therefore, might receive them later.
Families may find they will not qualify for the credit on their 2021 income taxes due to a later rise in earnings. Or they may later determine the child will be claimed as a dependent by someone else. In these cases, the parents can opt-out of the advance payments by unenrolling through the IRS portal, even if they’ve already received payments. Any change in circumstance that leads married couples needing to opt-out requires both parents to unenroll. Otherwise, if only one parent opts out, the family will receive half the monthly payments.