Payments for the Child Tax Credit will begin on July 15th. While the majority of eligible Americans will automatically get it, others will be required to supply additional information.
Monthly Payments for Eligible Families
In a recently published article in News Center Maine, it was reported that families who may be eligible for the monthly Advance Child Tax Credit payments may use a new online tool to assist them to set up. This is applicable to those who do not ordinarily need to file a tax return.
The Internal Revenue Service (IRS) said Monday that the Non-filer Sign-up tool has been updated from the one used last year by persons who needed to sign up for the COVID-19 stimulus payments. Eligible families can now register using this online tool.
In a recently published article in Yahoo Finance, families who do not file tax returns may now sign up for monthly Child Tax Credit (CTC) payments via the IRS's online site. This benefit will last until December this year.
How Much Will Eligible Families Receive?
The new, but temporarily enlarged, Child Tax Credit gives qualified parents a $3,000 benefit for each child aged 6 to 17 and a $3,600 credit for each child under the age of 6. Half of that money may be provided in the form of a monthly advance of $250 or $300 per child, with families able to claim the rest on their tax returns the following spring, according to a published article in Forbes.
Meanwhile, a parent filing as a single person is eligible for the full credit if they earn up to $75,000 per year. Parents filing as heads of household are eligible for the full credit up to $112,500 per year, while married couples filing jointly are eligible for the full credit up to $150,000 in income.
Furthermore, the payments are reduced by $50 for every $1,000 of adjusted gross income over certain limits. The CTC was also made fully refundable in the recent stimulus package, which means that qualifying families may get the whole credit regardless of whether they earn enough to incur income taxes.
Biden Proposes To Extend Monthly Payments Until 2025
President Joe Biden proposes extending the CTC's monthly payments until 2025 as part of his American Families Plan. He previously said that the administration intends to make the CTC payment permanent.
Some politicians also favor making the CTC and the enhanced Earned Income Tax Credit permanent. In fact, 40 Democratic Senators wrote a letter in March and stated that "Doing so would result in a significant spike in child poverty after we have made historic strides to end it. It would mean that millions of struggling adult workers would once again be taxed into poverty," according to a published report in Yahoo Finance.
They also added that these monthly benefits for qualified and eligible families in the country should not expire after one year but rather expanding the benefits. The IRS also clarified that eligible Americans may also utilize the Non-Filers service to sign up for this year's $1,400 stimulus payment or to recover rebate credits for prior stimulus payments missed.
Related Article: IRS To Start Monthly Payments of Child Tax Credit in July