$1,400 Stimulus Check Gone? An $8,000 Child Tax Credit Might Be Coming.
Families potentially could get back as a tax credit as much as half of their overall spending on child care for children under the age of thirteen, up to $4,000 for a single child, and $8,000 for two or more children.
The Internal Revenue Service and U.S. Treasury have announced via their latest update that more than twenty-five million coronavirus stimulus checks worth $36 billion have been disbursed this week to cash-starved Americans.
To date, this fourth batch of stimulus checks now brings the total number of payments to one hundred fifty-six million worth approximately $372 billion, according to the agencies.
However, to the surprise of many taxpayers, this current $1,400 cash windfall could potentially be the first of three rather sizeable payments.
As for the second check that you might be in line to receive, know that the $1.9 trillion American Rescue Plan expands upon the child tax credit that currently allows families to claim a credit of up to $2,000 for children under the age of seventeen.
That benefit now has been extended to lower-income families who otherwise wouldn’t receive such a credit. Families are now eligible to claim as much as $3,600 per year for a child under the age of six and up to $3,000 annually for children between six and seventeen.
For check number three, keep in mind that if you’re recently unemployed, you can claim $300 in additional weekly unemployment benefits, which include a brand-new tax break. Under the new legislation, these enhanced federal unemployment checks can be applied for till September 6, and the maximum amount of time you can collect is roughly a year.
The American Rescue Plan also discards a particular provision that you have to make $2,500 annually to receive the tax credit and makes the credits fully refundable.
Furthermore, tax credits have been extended for another year to help cover the cost of child care. Families potentially could get back as a tax credit as much as half of their overall spending on child care for children under the age of thirteen, up to $4,000 for a single child, and $8,000 for two or more children.
Also, take note that the fourth batch of stimulus checks has another surprise in store for many taxpayers—it is the first one that includes “plus-up” or supplemental payments for those who only received partial $1,400 payments on an earlier date.
“This batch includes the first of ongoing supplemental payments for people who earlier in March received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns,” the IRS said in a statement.
“These ‘plus-up’ payments could include a situation where a person’s income dropped in 2020 compared to 2019, or a person had a new child or dependent on their 2020 tax return, and other situations.”
Payments were also issued to those who recently filed tax returns in order to qualify for the stimulus money, due to the fact that the IRS did not have their necessary information on record. These checks will continue to go out on a weekly basis going forward, according to the agency.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.