Parents will be able to start receiving the first advance of financial support beginning on July 15 with the federal government's child tax credit payment, giving families monthly funds for half the total amount of the program continuing through 2021.
But many people are wondering if they are eligible because the rules of the program are difficult to fully understand. Similar to previous payment packages, the child tax credit has income thresholds and age requirements for dependents.
Financial Assistance
Officials are providing up to $300 per month per child, which totals to $3,600 for every dependent over the course of the next year and includes children born this year. Additionally, the government is giving parents the choice of getting monthly payments or a one-time lump sum when they file taxes in 2022.
A White House fact sheet suggested the American Families Plan will keep the child tax credit program going for a long time. This eased worries of many families struggling to meet their financial needs amid the coronavirus pandemic.
Parents who meet the income requirements will receive $3,600 for each dependent under the age of 6. The amount is nearly double the $2,000 they were able to get on their 2020 tax returns, CNET reported.
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Up until next month, parents can update the IRS with their new dependent information using an online portal. This will allow families to begin receiving the advance payments for this year. Parents can choose to file a claim on their 2021 tax return next year instead.
For families with dependents aged six to 17, parents will receive up to $3,000 for each child, with half-credit as $250 monthly payments. For parents with children aged 18, and those aged 19 to 24 that are full-time college students, they will receive a $500 one-time check in 2022 for each dependent.
Varying Amounts
For individuals who have $75,000 or less in annual salary, or couples who have a combined annual salary of $150,000 or less, they will be able to receive the full amount of payments. When an individual has a salary of $240,000, the amount received is phased out entirely.
Couples will have their payments phased out entirely when they reach a combined salary of $440,000. Authorities are phasing out the credit payments by $50 for every $1,000 of income above the threshold amounts for all filers, CBIZ Managing Director Joanna Powell said.
For individuals who are considered the head of the household, the full amount can be received if their annual salary is $112,500 or less. The credit payment will completely be phased out when they reach a salary of $240,000.
The payments will begin on July 15 and will be distributed every 15th of the month up until December. Officials said this will only be changed if the date falls on a weekend or a holiday. The money will be given out as direct deposit to allow parents to plan their budgets, AS reported.
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