IRS to start start sending out monthly payments to around 36 million families on 15 七月
In a few weeks, 上 15 七月, 这 IRS will begin sending out monthly payments to around 36 million families in the US. Families eligible to receive the expanded child tax credit will receive $1,800 divided into six payments that will be sent out until December.
But the intricacies of the credit may lead some to opt-out to avoid having to pay it back later.
The extra cash for families was a part of the 新冠肺炎 rescue package signed into law by President 乔拜登. 这 American Rescue Plan expanded the child tax credit from $2,000 per child, taken every year when you file your taxes, 至 $3,600 per child with half the amount paid in monthly installments. They will be sent out from July to December and the rest will be claimed on your tax return for 2021.
“He thinks this is a central benefit that will help families, help get women back to work,” Ms Psaki said of the president while pointing out that more than a million women have left the workforce during the pandemic.
The tax credit is only available to lower-and-middle income families. Unlike the procedure with the stimulus payments, if you receive funds you’re not eligible for, you will have to pay it back.
“If you receive a total amount of advance Child Tax Credit payments that exceed the amount of Child Tax Credit that you can properly claim on your 2021 tax year, you may need to repay to the IRS some or all of that excess payment,” the agency said on its website.
Who qualifies for the monthly payments?
The rescue packages expanded the child tax credit to $3,600 for every child under the age of six and to $3,000 for each child between the ages of six and 17.
Those who qualify for the payments are single taxpayers with an income up to $75,000, head of household with an income of up to $112,500, and married couples filing jointly and qualified widows and widowers with an income of up to $150,000.
Families with higher incomes will receive $50 less per $1,000 more that they earn compared to the thresholds for each category. The payments are phased out for people who make around $20,000 more than the relevant threshold.
This means that single filers making up $95,000 and married couples together making up to $170,000 will receive smaller payments before they’re phased out entirely.
The regular $2,000 child tax credit taken every year on your tax return will still be available to single filers making up to $200,000 and married couples making up to $400,000. Those making more than that don’t qualify for any child tax credit.
How much will I receive?
If you qualify, you will get $300 per month for each child under the age of six and $250 per month for every child between the ages of six and 17 from July until December of this year.
What do I need to do to get the money?
Usually nothing. If your situation has not changed since your 2020 tax return – if you have the same address, bank account, and the same number of dependents – the IRS should have the information they need to send the funds directly to your bank account.
The IRS has sent letters to 36 million families eligible based on the information from their 2019 和 2020 tax returns and to those who sent in information using the agency’s non-filers tool, such as low-income families not required to file a tax return, to register for stimulus payments last year.
The IRS will shortly send another letter to estimate the monthly payments of eligible families.
What if I’m not required to send in a tax return?
What do I need to do to opt out?
The IRS has said that those who think their situation has changed, making them ineligible for the Child Tax Credit expansion, should opt-opt out using an online tool that will be available on the IRS website by the end of June. The “Child Tax Credit Update Portal” will allow people to avoid a future bill from the IRS by unenrolling from the tax credit.
Can the Child Tax Credit be garnished?
While the IRS has said yes, some states, 如 加利福尼亚州, have decided to shield their residents and their tax credit payments from being garnished by creditors.
Will the IRS reduce your tax credit to make up for federal back taxes?
The IRS has said that the monthly payments will not be affected by owed taxes.
But the agency has also stated that if you get a refund from your 2021 tax return, funds that may remain from the Child Tax Credit could be used to settle tax debts.