If you have children under the age of 18, chances are good you received some cash from the federal government last week. The White House says $15 billion in payments have been sent out to the families of nearly 60 million children. Families will receive the funds by direct deposit or check. How much you get will depend on income and number of eligible children. It's a huge undertaking by the IRS. The White House is describing the one-year expansion as historic relief to the largest number of working families ever.
Here are some key facts about how it works.
For every child under the age of 6, families will get up to $3,600 under the expansion, or $300 per month. For every child ages 6-17, the amount is $3,000, or $250 per month. This is a significant increase from past years when the credit was $2,000 per child, ages 0-16.
The amount starts phasing out for families with higher incomes, above $150,000 for married couples filing jointly, or $112,500 for single parents who file as head of household.
What's being sent out is known as an advance child tax credit payment. In the past, families eligible for the child tax credit would have gotten it as a one-time lump sum when they filed their taxes. Now, half of the credit will be disbursed over six months, with a payment made on or around the 15th of every month from now until December. You get the second half of the credit when you file your taxes.
If you file federal taxes, you should automatically get the monthly payments. If you don't file taxes, you need to register at irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool. People who don't file taxes but received stimulus checks in the pandemic should automatically receive the payments.
Yes. Go to www.irs.gov/credits-deductions/child-tax-credit-update-portal. You need to set up an account and verify your identity before you can stop the monthly payments. By opting out, you are not turning down the credit. You are just delaying when you get it. This may be a good option for people who are accustomed to getting a sizable credit on their tax bill in the spring and count on that to offset taxes due or to make a big purchase.
The expanded child tax credit covers children from birth to 17. If your child turns 18 in 2021, he or she will no longer be eligible. However, because the advance payments are based on earlier tax filings, you may still receive money for a child who is ineligible. Most people will have to pay that money back. The IRS does have a repayment protection program for lower-income earners.
If you have a baby anytime in 2021, that baby is eligible for the credit. The IRS says you will be able to make changes to your dependents, marital status and income on its website by late summer.
What happens after this year?
The expanded child tax credit is only for 2021, but there is a proposal before Congress to expand it.
(Partially reprinted from National Public Radio at npr.org)
Please understand that WKFCU does not have the information to tell members when Expanded Child Tax Credits will arrive, if they will receive one or the amount of the payment. Please visit the IRS.Gov website for information about these payments.
Please be sure your account information is correct. Use your 4 or 5 digit number for your Savings/Share account and your 10-digit number to indicate your Checking/Share Draft account. If this information is incorrect, your payments will be returned.
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