Good News For Parents – IRS Reveals When New Advance Child Tax Credit Will Hit Their Bank Accounts
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Going to the mailbox will be a little less anxiety-inducing for parents in the coming months. Mixed in with all of the bills will be a letter about the pending Advance Child Tax Credit.
The IRS released the child credit payment schedule earlier this week. The government agency was initially vague about when and how parents would receive payments but announced this Monday that it has begun sending letters to the 36 million families who are likely eligible for the credit.
First, here’s a breakdown of the people eligible to receive the new child tax credit.
“The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March. The letters are going to families who may be eligible based on information they included in either their 2019 or 2020 federal income tax return or who used the Non-Filers tool on IRS.gov last year to register for an Economic Impact Payment.”
Families eligible for Advance Child Tax Credit payments will receive another personalized letter with an estimate of their monthly payment. Those payments begin on July 15th.
According to the agency, “most families do not need to take any action to get their payment,” and the IRS will calculate the payment amount based on the 2020 tax return.
If a 2020 tax return is not available, either because it has not yet been filed or has not yet been processed, the IRS will instead determine the payment amount using the 2019 return.
The IRS urges individuals and families who haven’t filed their 2020 return – or 2019 return – to do so immediately to receive all eligible payments.
Here are the dates the Child Tax Credit Payments should show up in your accounts:
- July 15
- August 13
- September 15
- October 15
- November 15
- December 15
How to determine if you’re eligible for the Advance Child Tax Credit payments:
The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for qualifying children under the age of 6 and $3,000 per child for qualifying children between ages 6 and 17.
Before 2021, the credit was worth up to $2,000 per eligible child, and 17 year-olds were not considered as qualifying children for the credit.
The new maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of:
- $75,000 or less for singles,
- $112,500 or less for heads of household, and
- $150,000 or less for married couples filing a joint return and qualified widows and widowers.
To help with any questions, the IRS is also adding two new tools to its child tax payment website: an eligibility tool to help determine if a family qualifies for Advance Child Tax Credit payments and a portal that will allow people to opt-out of the advance monthly payments.
In addition, the entire credit is fully refundable for 2021. This means that eligible families can get it, even if they owe no federal income tax.
For more information, consult the official press release on the IRS.gov website.
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