Who will receive a monthly check? – CBS Detroit


(CBS Baltimore) – The updated child tax credit will begin in about two weeks. On July 15, the Internal Revenue Service (IRS) will pay millions of parents up to $ 300 per child. Monthly payments will run through the end of 2021 and in total could be more than any previous stimulus checks. The credit could continue beyond this year, if the draft US plan for families passes into its current form. But who is entitled to the payments and how can we be sure that the money is coming?

Who is eligible for a monthly payment?

For parents of children up to age five, the IRS will pay $ 3,600 per child, half of six monthly installments and half of a tax credit for 2021. This rises to 3,000 $ in total for each child aged six to 17. The IRS will make a one-time payment of $ 500 for dependents age 18 or full-time students up to age 24.

READ MORE: Child tax credit: what does the updated credit mean for families?

Payments will be based on the Modified Adjusted Gross Income (AGI) reflected on the 2020 income tax return of a parent or parents. (AGI is the sum of salaries, interest, dividends, alimony, retirement distributions, and other sources of income minus some deductions, such as student loan interest, child support payments, and pension contributions.) gradually at a rate of $ 50 per $ 1,000 of annual income over $ 75,000 for an individual and over $ 150,000 for a married couple. The benefit will be fully refundable, which means it will not depend on the recipient’s current tax burden. Eligible families will receive the full amount regardless of what they owe in taxes. There is no limit to the number of dependents that can be claimed.

As an example, suppose a married couple have a four-year-old and an eight-year-old and have a joint annual income of $ 120,000 on their 2020 taxes. The IRS would send them a monthly check for 550. $ from July. That’s $ 300 per month ($ 3,600 / 12) for the youngest child and $ 250 per month ($ 3,000 / 12) for the older child. These checks would last until December. The couple would then receive the balance of $ 3,300 – $ 1,800 ($ 300 X 6) for the youngest child and $ 1,500 ($ 250 X 6) for the older child – as part of their repayment of 2021 tax.

Parents of a child outside an age bracket will receive the lower amount. This means that if a five-year-old turns six in 2021, parents will receive a total credit of $ 3,000 for the year, not $ 3,600. Likewise, if a 17-year-old turns 18 in 2021, parents will receive $ 500, not $ 3,000.

An increase in income in 2021 to an amount above the threshold of $ 75,000 ($ 150,000) could reduce a household’s child tax credit. The IRS has confirmed that it will soon allow applicants to adjust their income and custody information online, reducing their payments. Failure to do so could increase your tax bill or reduce your tax refund once the 2021 taxes are filed.

Eligibility requires that the dependent be part of the household for at least half of the year and be at least half supported by the taxpayer. A taxpayer who earns more than $ 95,000 ($ 170,000) – where income limits gradually disappear – not be eligible for extended credit. But they can still claim the existing credit of $ 2,000 per child.

READ MORE: Child tax credit: three IRS tools to help you get what you are owed

Families likely to be eligible received a letter of qualification in the first half of June. He said, in part, “If you are eligible for advance payments from the CTC and want to receive those payments, you don’t have to do anything.” You will receive a letter with more details.

The second letter estimating the amount is pending.

How to make sure you receive a monthly payment

If a parent has filed taxes for 2019 and / or 2020 and meets the conditions outlined above, nothing more needs to be done. The IRS has the information it needs. They will automatically start issuing payments in the near future.

If a parent is not sure whether they qualify, they can check the Child Tax Credit Eligibility Assistant. The tool will walk a taxpayer through a series of questions to determine if they meet the basic requirements. It is necessary to have your tax return handy or, failing that, some basic information on income and eligible children.

Many eligible parents do not file taxes. For this reason, the IRS also implemented the Registration tool for non-filers for the child tax credit. The portal allows parents who do not usually declare taxes to provide basic information about themselves. This information includes their name, address, email address, date of birth and social security number. The IRS will then use the information provided to verify eligibility and automatically begin issuing monthly payments.

The IRS recently launched the Child Tax Credit Update Portal as well as. This tool allows a potential beneficiary to verify their eligibility, see if they are eligible for advance payments, and opt out of monthly payments. Opting out of monthly payments means the taxpayer will receive the full credit when they file their 2021 taxes.

NO MORE NEWS: Child tax credit: IRS faces potential issues with monthly check implementation

First published Thursday, June 24, 2021 at 6:21 p.m. ET.

Source link


Leave A Reply