The Biden administration begins handing out expanded child tax credit payments, giving parents an average of $ 423 this month, with payments continuing through the end of the year.
President Joe Biden has increased the amount of the tax credit under his $ 1.9 trillion coronavirus relief program, while making it fully accessible to families without any tax liability. The benefit is expected to expire after a year, but Biden is pushing for it to be extended until 2025 and ultimately made permanent.
Let’s take a closer look at how payments work and who can receive them:
WHAT ARE THE CREDITS?
The credit is $ 3,600 per year for children under 6 and $ 3,000 for children 6 to 17 years old. But six months of payments will be advanced monthly until the end of the year. This means that eligible families will receive $ 300 per month for each child under 6 and $ 250 per older child.
This is a change from last year when the credit totaled $ 2,000 per child. Families who did not owe government income taxes were also unable to claim the credit, a restriction that Biden and Congress lifted.
ARE THERE LIMITS ON WHO CAN QUALIFY?
Payments are starting to disappear at incomes of $ 75,000 for individuals, $ 112,500 for heads of households and $ 150,000 for married couples. Higher income families with incomes of $ 200,000 for individuals and $ 400,000 for married couples can still receive the previous $ 2,000 credit.
HOW CAN YOU APPLY?
If you’ve filed taxes and the IRS already has your bank account information, payments should be deposited directly into your account on the 15th of each month. The Treasury Department estimates that 35.2 million families will receive payments in July. But even if you didn’t declare taxes in 2019 or 2020, you might still be eligible for the credit and can apply here: https://www.irs.gov/credits-deductions/child-tax- credit-non-filer – registration tool.
WHY ARE PAYMENTS MONTHLY
Advocates say monthly payments can help smooth an impoverished family’s income, making it easier for them to plan their budgets and less depend on high-interest lenders.
CAN MONTHLY PAYMENTS BE STOPPED?
Yes. Some people are used to the child tax credit which allows them to get their taxes back. They might not want the monthly advance and around 1 million people have pulled out, administration officials said. People can unsubscribe here: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal.
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