The Internal Revenue Service has released more information about when the expanded Child Tax Credit will begin and when portals will be available to help parents enter information if needed.
Under the American Rescue Plan Act, millions of parents will be eligible to receive an increased credit for their 2021 income tax return. The American Rescue Plan will allow half of the credit to be taken in advance. Normally, a Child Tax Credit is taken when taxes are filed for the previous year’s income.
Last week, the IRS announced that the first Child Tax Credit payment will go out on July 15 and that the subsequent five payments will be sent on the 15th of each month until December (except when the 15th falls on a holiday or a weekend.)
The IRS also announced that it would launch two portals on July 1. One will allow parents to register for the payments if they don’t usually file a tax return, and the other will allow parents to update information if there is a change in the number of their dependents or if they want to opt out of the monthly payments.
If an eligible taxpayer does not want to receive the 2021 Child Tax Credit in advance, they will have the opportunity to decline those payments and receive the full benefit when they file their 2021 tax returns next year.
If you are a parent with an eligible child and want the payments sent to you monthly, and if you have not had a change in eligible dependents, you do not have to do anything for the payments to begin.
Families claiming the credit will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021 and $3,600 per qualifying child under age 6 at the end of 2021.
The prior credit allowed for up to $2,000 per qualifying child under the age of 17 at the end of the year.
The credit is available to married taxpayers filing jointly who make less than $150,000, those filing as head of household who make less than $112,500 and all other taxpayers who make less than $75,000.
The IRS will send payments of up to $350 for parents of children up to 6 years old, and up to $300 for parents of children ages 6-17.
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