BizBoost News
Volume 11, Issue 2
For distribution 7/12/21; publication 7/15/21
Child Tax Credit Payouts – What to Expect
The Child Tax Credit (CTC) is not new, but it was expanded as part of the American Rescue Plan Act of 2021, and you may be wondering what that means and how it will impact your situation. The biggest takeaway is that instead of waiting until filing your 2021 tax return (in 2022) to take advantage of the credit, you can instead opt to receive part of the credit in advance, during 2021.
First, the overall amount of the credit was increased for taxpayers under a certain income level. For those individuals, the CTC is $3,600 for each child 5 and under, and $3,000 for each child between the ages of 6 and 17. This is an increase from $2,000 per child under the existing rules. To receive the full amount of the expanded credit, your Adjusted Gross Income (AGI) must fall within the following limits:
- Single Filer - $75,000 or less
- Head of Household Filer - $112,500 or less
- Joint Filers - $150,000 or less
Beginning on July 15, 2021, IRS will begin sending monthly payments to parents with eligible dependent children. These payments represent an advance on the full CTC, and the rest can be claimed on the 2021 tax return. The full monthly payment will be $300 per child under 6 or $250 per child 6 to 17 years old, and will be paid each month from July to December 2021. Keep in mind that if you are over the above income thresholds but within the existing income thresholds for receiving the CTC, you can still receive up to $2,000 per child, just like in years past.
To automatically receive these payments if eligible, you need to have filed a tax return for 2020 by the extended May 17,2021 filing deadline, even if you are usually a non-filer. You are eligible for these payments even if you do not have any income to report or taxes due. If you were not able to file by then, you will still get the higher credit amount if eligible, but will need to wait until filing your 2021 tax return to take advantage of it.
If you would prefer to NOT receive the advance payments and instead take advantage of the full CTC when filing your 2021 tax return, you will be able to opt out using an online portal that IRS will be opening on July 1, 2021. There will also be another portal where you can update your information, such as changing the number of dependents you have.
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Beginning on July 15, 2021, IRS will begin sending monthly payments to parents with eligible dependent children. These payments represent an advance on the full Child Tax Credit, and the rest can be claimed on the 2021 tax return. Subscribe here to learn more: [link]
The Child Tax Credit (CTC) is not new, but it was expanded as part of the American Rescue Plan Act of 2021. Learn what to expect from the Child Tax Credit Payouts in our latest blog article: [link]
DID YOU KNOW: The Child Tax Credit will come early for eligible taxpayers, as early as this month. Learn more here: [link]
Are you wondering what the Child Tax Credit expansion means and how it will impact your situation? Learn what to expect from this expansion in our latest blog article: [link]
The biggest takeaway from the expansion of the Child Tax Credit is that instead of waiting until filing your 2021 tax return (in 2022) to take advantage of the credit, you can instead opt to receive part of the credit in advance, during 2021. Learn more here: [link]
With the expansion of the Child Tax Credit, the overall amount of the credit was increased for taxpayers under a certain income level. The CTC is now $3,600 for each child 5 and under, and $3,000 for each child between the ages of 6 and 17. Find out more here: [link]
To receive the full amount of the expanded Child Tax Credit, your Adjusted Gross Income (AGI) must fall within the following limits:
•Single Filer - $75,000 or less
•Head of Household Filer - $112,500 or less
•Joint Filers - $150,000 or less
Find out more here! [link]
The new expansion of the Child Tax Credit can be confusing. For example, if you prefer to NOT receive the advance payments and instead take advantage of the full CTC when filing your 2021 tax return, you will have to opt out using an online portal that IRS will be opening on July 1, 2021. Learn more in our latest blog article: [link]
