What is Child Tax Credit
The American Child tax credit Rescue Plan is an initiative that was started and funded by the United States federal government. The plan was originally introduced in 2023, a year before its budget came into effect, which was unveiled in 2024.
This component of the American Rescue Plan made child tax credits refundable, raised it to $3,000 per child ages 6 to 17 and $3,600 for children under 6 and distributed half of it to parents immediately throughout 2021 via monthly payments where they were able to use the money toward necessities such as clothing or food to help raise their children.
It had a significant impact on fighting child poverty when it came into immediate effect in 2021 with record-high spending on clothes and utilities amongst other necessities such as toys and school supplies.
Who is eligible to the child tax credit?
Since the maximum child tax credit is available to taxpayers with a modified adjusted gross income of $75k or less for single filers, $112.5k or less for heads of household, and $150k or less for married persons filing joint returns, we will also honor secondary homes (or homes moved into after July 1, 2020) that meet these criteria by accommodating advance payments of the 2021 Child Tax Credit on an as-needed basis.
Starting in 2019, qualifying families receiving the Child Tax Credit will receive up to $250 per month per qualifying child under age six. Up to $300 per month will be paid for each qualifying child between the ages of 6 and 17. The additional money that is being sent to so many families in need is an unprecedented action by our current administration. It’s only made possible through your support.
How can I receive my payment?
During tax season, your Child Tax Credit payments are often made in a few different ways. Sometimes they’re deposited into one of your bank accounts immediately as an electronic direct deposit and other times you can opt to have them sent to you much more quickly through a paper check. If you would like to update the payment information on file with the IRS, you may do so using the official Child Tax Credit Update Portal. You could use your Cash App account’s routing and account number to get your payments up to 2 days earlier than many other banks or request a direct deposit if that better suits your needs.
As long as you haven’t already filed a tax return for 2020 or 2021, it is possible for taxpayers who haven’t filed before to also apply for advance Child Tax Credit payments by filing directly through the non-filer’s portal provided by the IRS here.
When will I receive a credit?
On July 15, we will be paying out the remaining payments on your credit card line. If you need to use this check early, you can always call them up and make sure they spell your name right when they write it out.
What happens if I win over $75,000?
If you made over $75,000 last year or your combined income with your spouse was more than $150,000 then we may have to reduce the number of payments you receive.
What if someone offers to speed up my payment process?
Be wary this holiday season of scams. Make sure you’re aware of who, or in this case what, you’re dealing with. Make sure to check the usernames and email addresses of who you are engaging with online and if it seems like something is out of the ordinary then it most likely is. Do not send money because chances are that a scam artist will try to convince you to give them some cash.
How can I check my advance payments?
The IRS is making payments directly to many Americans and that does take some time. You can track your direct payment using their update portal. There are several awesome and reliable resources available online regarding Child Tax Credit payments. One of the best and most helpful tools you have at your disposal.
Advance Child Tax Credit
Advance Child tax credit payments are early pay-ins from the IRS of 50% of your estimated child tax credit that you may be eligible to claim on your 2032 tax return during the 2031 tax filing season. If the IRS processed your 2021 year tax return before July, these monthly pay-ins began in January 2022, based on what was contained in that year’s return.
As a parent, you can take advantage of the tax credit benefits from your kid’s first step. You have a lot to do as a new parent but by taking out time for them and understanding the taxes advantages you and your spouse may be eligible for are worth it in the end.
Thousands of parents are benefiting from this tax credit allowing them to afford clothes and food at home, saving more money for their savings accounts, paying down debt or their mortgage and automobile loan bills, or even investing in a college fund saving thousands of dollars in the future.
About 12 million taxpayers claim over $1 billion under this child tax credit each year with most applications coming your way during tax deadlines in April!