Here's What You Need to Remember: Eligibility for the credit is based on income, with individuals making up to $75,000 eligible for the credit, as are heads of households and married couples filing jointly who make up to $112,500 and $150,000, respectively.
The Internal Revenue Service announced earlier this week that it had begun sending letters to more than thirty-six million American families who may be eligible to receive Child Tax Credit payments based on information on file with the agency. The IRS has made determinations of eligibility based on 2020 tax returns or, when those are not available, 2019 tax returns or information provided by those who do not normally file using the Non-Filers tool on the IRS’s website.
The IRS also indicated that it would be sending a second letter to eligible families that will include an estimate of their monthly payments, which are set to begin next month. Most families will not need to take any additional action in order to begin receiving their payments, though the agency is also encouraging those people who have not yet filed their 2020 tax return to do so soon in order to ensure that they receive any payments that they may be eligible for, according to the IRS.
The IRS is also planning to open two online portals on July 1 that will provide potential Child Tax Credit recipients with some helpful tools. One portal will be available for those who wish to opt-out of the monthly advance payments and instead want to receive their payment as one larger lump sum during next year’s tax season; by default, the credit will be paid out in monthly advance payments in addition to a single lump-sum payment during tax season. A second portal will be available to families who do not normally file tax returns so that they can be sure that their information is as up-to-date as possible.
The portals will also allow families to update relevant information, such as changes in income, child custody status, or the number of children in the household to make sure that they are getting the full amount they are eligible for.
The Child Tax Credit was expanded as part of the American Rescue Plan that was passed in March. Changes made to the credit include expanding the size of the payment available to families, with $3,600 now available for children under six and $3,000 payments on offer for children up to seventeen; previously, a credit of $2,000 was available only for children up to six years of age.
Eligibility for the credit is based on income, with individuals making up to $75,000 eligible for the credit, as are heads of households and married couples filing jointly who make up to $112,500 and $150,000, respectively.
Eli Fuhrman is a contributing writer for the National Interest. This article first appeared earlier this year.