The excitement continues to build as the new Advanced Child Tax Credit launches. The advance child tax credit payments could help families get out of debt and start fresh. Fortunately, nearly 90% of American children will be covered by advance payments of the credit, according to the IRS. However, there are still taxpayers who don’t know how it will affect them.
So how much is the credit? Do you qualify? And when will your payments arrive? Here’s what you need to know about the advance child tax credit.
How Much is the Child Tax Credit?
The child tax credit is a big help for families with children. For children ages 5 and under, the credit is $3,600. For children between the ages of 6 to 17, the payment is $3,000. For example, a family with two children ages 4 and 8 would receive $550 per month. This is an increase from the previous $2,000 refund per child. This year’s adjustments also raised the maximum qualifying age of children from 16 to 17. Families can expect to receive half of their qualifying amount in monthly payments beginning July 15th and the other half with their tax return.
Do I Qualify for the Advance Child Tax Credit?
The IRS reported that nearly 40 million households are eligible for the monthly child tax credit. To qualify, married taxpayers who filed jointly must show less than $150,000 in 2020 (or 2019 if they didn’t file in 2020). The full amount will also go to single heads of households who made up to $112,500 and individuals who made up to $75,000.
If your income exceeds these thresholds, you will be responsible for repaying the total amount of any overpayment on your tax return.
So how do you get these payments? Fortunately, they will be automatic if you filed a 2019 and 2020 tax return. No other action is required to get these payments. With that said, you’ll need to take action if you want to opt out or have updates to your personal information. You may opt out if you prefer to receive the full credit when you file your 2021 tax return or if your income has changed since last year.
When Will the Monthly Child Tax Credit Payments Arrive?
Families who receive IRS refunds through direct deposit can expect their payments on the 15th of each month from July through December. Those who don’t have a bank account tied to their filing will receive a check at their physical address listed on their return.
Need Tax Help? Call US Tax Shield
As more information comes out about the Advance Child Tax Credit and the advance payments, you may have more questions related to taxes. At US Tax Shield, we’re committed to helping you understand and navigate the complexities of the IRS and taxes.
Contact US Tax Shield today at (877) 829-3535 for your free, no-obligation consultation.
