President Joe Biden has declared that \u201chelp is here\u201d for families with children who will begin receiving advanced monthly payments from the child tax credit.<\/p>\n
For tax year 2021, the Internal Revenue Service reported that families claiming the credit will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. They will receive $3,600 per qualifying child under age six at the end of 2021. Previously the amount of the CTC was up to $2,000 per qualifying child under the age of 17 at the end of the year.<\/p>\n
The increased amounts are reduced for incomes over $150,000 for married taxpayers filing a joint return and qualifying widows or widowers, $112,500 for heads of household, and $75,000 for all other taxpayers. Families will receive monthly payments from the IRS of up to $300 for each child under six years old. They will get $250 for each child over six and up to 18 years old. The advance payments of the 2021 Child Tax Credit will arrive each month beginning on July 15 and through December to eligible taxpayers who have a primary home in the United States for more than half the year.<\/p>\n
The IRS said the total of the advance payments would be up to 50 percent of the Child Tax Credit. Advance payments will be estimated from information included in eligible taxpayers\u2019 2020 tax returns \u2013 or 2019 returns if the 2020 returns are not filed and processed yet. The IRS is urging people with children to file their 2020 tax returns as soon as possible to make sure they\u2019re eligible for the appropriate amount of the Child Tax Credit and any other tax credits they\u2019re eligible for, including the Earned Income Tax Credit (EITC).Filing electronically with direct deposit also can speed refunds and future advance CTC payments, the IRS said.<\/p>\n
Eligible taxpayers do not need to take any action now other than to file their 2020 tax return if they have not done so.<\/p>\n
\u201cThe American Rescue Plan is delivering critical tax relief to middle class and hard-pressed working families with children. With today\u2019s announcement, about 90 percent of families with children will get this new tax relief automatically, starting in July,\u201d President Biden stated. \u201cWhile the American Rescue Plan provides for this vital tax relief to hard-working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come. For working families with children, this tax cut sends a clear message: help is here.\u201d<\/p>\n