SAN ANTONIO – The Internal Revenue Service has been busy sending people money throughout the last year as economic stimulus payments to help Americans who are suffering financially due to the coronavirus pandemic.
Thanks to the American Rescue Plan Act (ARPA) of 2021 and an expansion of the Child Tax Credit for 2021, some families will start receiving advance payments in July.
According to the IRS, advance payments of the 2021 Child Tax Credit will be made monthly from July through December to eligible taxpayers who have a main home in the United States for more than half the year. Payments are expected to start on July 15.
The credit will include children who turn 17-years-old in 2021 and is fully refundable, meaning taxpayers who don’t owe income tax or have any earned income can still benefit from the child tax credit.
Families claiming the child tax credit for the 2021 tax year will receive up to $3,000 for each qualifying child ages 6-17.
The credit will increase to $3,600 for qualifying children under the age of 6.
Previously, the child tax credit was $2,000 for qualifying children under age 17.
The advance payments sent to qualifying families will be up to 50% of the child tax credit, and the payments will be estimated from information found in eligible taxpayers’ 2020 tax returns. 2019 tax returns will be used to determine payments if a family’s 2020 taxes have not yet been filed.
This means that families will receive $300 a month from July to December for each qualifying child under age 6, for a total of $1,800. The other $1,800 will be included in a family’s 2021 taxes. Families with children ages 6-17 will get $250 a month.
According to the IRS, tax credits will be reduced for families with 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.
If you qualify for the child tax credit but do not want to receive the advance payments, the IRS website says details on how to waive the advance payments will be announced soon.