Want that Child Tax Credit? You May Want to File Your Taxes
Those people who believe they may be eligible to take advantage of the expanded Child Tax Credit, but whom the IRS has not yet identified as eligible, should file their 2020 tax returns as soon as possible if they have not already done so.
Here's What You Need to Remember: The Child Tax Credit has been expanded this year, with a number of important changes to both eligibility and the size of payments available. Whereas normally a $2,000 credit is available for children up to six years of age, this year the credit includes a payment of $3,600 for children under six and payments of $2,000 for those up to seventeen.
Next month will see the first advance payments as part of the expanded Child Tax Credits sent out to eligible American families. If you are or think that you will be a recipient of these payments, there are some helpful things to keep in mind.
The IRS recently announced that it was sending letters of notice to about 36 million American families that could be eligible for the payments. Those receiving letters will have been determined to be eligible by the IRS based on their 2020 tax returns, or on 2019 tax returns or information provided by non-filers using the Non-Filer tool on the IRS’ website in cases when more recent returns are not available. According to the IRS, these recipients will not need to take any additional action in order to begin receiving their payments and should expect to receive a follow-up letter in the next few weeks with estimates of their payments.
Those people who believe they may be eligible to take advantage of the expanded Child Tax Credit, but whom the IRS has not yet identified as eligible, should file their 2020 tax returns as soon as possible if they have not already done so. The IRS is also planning to make tools available for people to make sure they are able to fully take advantage of the credit in the form of two online portals set to go live next month. One of the portals will be aimed at people who do not normally file taxes to ensure that they are able to accurately provide all necessary information to the IRS, while the other will be available for those people who would prefer to receive a single lump-sum payment during next year’s tax season instead of a lump sum alongside the monthly payments.
The IRS has also announced the schedule of payments, with the first due to be sent out on July 15 with subsequent payments going out on the 15th of every month through December (the payment for August, however, will be sent out on the 13th of that month).
The Child Tax Credit has been expanded this year, with a number of important changes to both eligibility and the size of payments available. Whereas normally a $2,000 credit is available for children up to six years of age, this year the credit includes a payment of $3,600 for children under six and payments of $2,000 for those up to seventeen. This will translate to monthly payments of $300 for each child under six and $250 for children above six. Individuals making up to $75,000 will be eligible for the credit, as will 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.
Image: Reuters