(CBS Baltimore) — The fifth Child Tax Credit payment from the Internal Revenue Service (IRS) will be sent this coming Monday. But many parents want to know when exactly the money will be deposited in their bank account. Last month’s checks started arriving the morning of October 15 for those with direct deposit, or soon after for those who received it through the mail. This month’s payment will got out on Monday, November 15. Advance payments will continue next month, thanks to the American Rescue Plan passed back in March of 2021. While another stimulus check seems unlikely at this point, Democratic lawmakers are looking to extend the advance Child Tax Credit through 2025.
Families can use the Child Tax Credit money however they like. That means the extra $250 or $300 per child can be put toward essentials like food or rent. It may also be spent on school supplies or a new computer, should COVID push students back into remote learning. Other households may apply the money toward piano lessons, daycare or even diapers. Regardless, the money comes at a time when much of the other pandemic aid — most recently the extra unemployment insurance — has ended. Knowing that additional income is coming allows for a measure of security and flexibility in a world that’s full of surprises.
How Much Should Your Check Be?
READ MORE: Fourth Stimulus Check: Is Another Relief Payment Possible?
The IRS is paying $3,600 total per child to parents of children up to five years of age. That drops to $3,000 for each child ages six through 17. Half of the total is being paid as six monthly payments and half as a 2021 tax credit. So each month through December parents of a younger child are receiving $300, and parents of an older child are receiving $250. The IRS has also made a one-time payment of $500 for dependents age 18 or full-time college students up through age 24.
A reminder to American families this Fall: #IRS is issuing millions of advance monthly #ChildTaxCredit payments through Dec. 2021. If you have questions, see the answers we’ve posted online at: https://t.co/Om9jyBsGP3 pic.twitter.com/5fA1g8S54n
— IRSnews (@IRSnews) November 9, 2021
The updated Child Tax Credit is based on parents’ modified adjusted gross income (AGI), as reflected on their 2020 tax filing. (AGI is the sum of one’s wages, interest, dividends, alimony, retirement distributions and other sources of income minus certain deductions, such as student loan interest, alimony payments and retirement contributions.) The amount phases out at a rate of $50 for every $1,000 of annual income beyond $75,000 for an individual and beyond $150,000 for a married couple. The benefit is fully refundable, meaning it does not depend on the recipient’s current tax burden. Qualifying families receive the full amount, regardless of what they owe in taxes. There is no limit to the number of dependents that can be claimed.
For example, suppose a married couple has a three-year-old child and a seven-year-old child and showed an annual joint income of $120,000 on their 2020 taxes. The IRS is sending them $550 per month. That’s $300 per month ($3,600 / 12) for the younger child and $250 per month ($3,000 / 12) for the older child. Those payments will last through December. The couple would then receive the $3,300 balance — $1,800 ($300 X 6) for the younger child and $1,500 ($250 X 6) for the older child — as part of their 2021 tax refund.
Parents of a child who matures out of an age bracket are paid the lesser amount. That means if a five-year-old turns six in 2021, the parents will receive a total credit of $3,000 for the year, not $3,600. Likewise, if a 17-year-old turns 18 in 2021, the parents are receiving $500, not $3,000.
Some people received a little more than the correct #ChildTaxCredit payment in September. To adjust for this, the next #IRS payments will be slightly reduced. Learn more at: https://t.co/H05t6S0flj
*Thanks for sharing your art with us, Alex!* pic.twitter.com/rWn2pQtpjK
— IRSnews (@IRSnews) November 7, 2021
An income increase in 2021 to an amount above the $75,000 ($150,000) threshold could lower a household’s Child Tax Credit. The IRS has confirmed that they’ll soon allow claimants to adjust their income and custodial information online, thus lowering their payments. Failure to do so could increase one’s tax bill or reduce one’s tax refund once 2021 taxes are filed.
Eligibility requires that the dependent be a part of the household for at least half of the year and be at least half supported by the taxpayer. A taxpayer who makes above $95,000 ($170,000) — where the Credit phases out entirely — will not be eligible for the expanded credit. But they can still claim the existing $2,000 credit per child.
How Do You Make Changes For Future Payments?
The IRS has three different tools to help recipients and potential recipients update their information on file, register and check eligibility.
Child Tax Credit Update Portal
READ MORE: Supply Chain Issues: ‘There Really Are Problems Everywhere,’ Even For Small Companies
The Child Tax Credit Update Portal allows users to make sure they are registered to receive advance payments. It also lets recipients unenroll from advance payments in favor of a one-time credit when filing their 2021 taxes. The deadline for the next payment was November 1. The last opt-out deadline for the last future payment of the current version of the advance Child Tax Credit is November 29.
The tool also allows users to add or modify bank account information for direct deposit, view their payment history, update their mailing address, and change their adjusted gross income. Users will soon be able to adjust dependent information as well.
To access this portal, users need an IRS username or an ID.me account. ID.me is a sign-in service used by various government agencies, including the IRS, Social Security Administration and Treasury Department, to authenticate users. Users need valid photo identification to create an account.
Child Tax Credit Non-Filer Sign-Up Tool
The Child Tax Credit Non-Filer Sign-Up Tool is to help parents of children born before 2021 who don’t typically file taxes but qualify for advance Child Tax Credit payments. That means parents who have not filed their 2020 taxes, are not required to file, and don’t plan to file. (Parents who claimed their dependents on their 2019 tax return should not use this tool.)
Users enter their personal information, including their name, mailing address, email address, date of birth, relevant social security numbers, bank account information, and identity protection PIN. The IRS uses the information to check eligibility and, once confirmed, will begin making payments. The IRS and experts advise using the tool on a desktop or laptop computer rather than a mobile device.
Child Tax Credit Eligibility Assistant
The Child Tax Credit Eligibility Assistant lets parents check if they are eligible to receive advance Child Tax Credit payments. Users will need a copy of their 2020 tax return or, barring that, their 2019 tax return. It’s also fine to estimate income and expenses from the appropriate tax year, though the result may not be accurate. The assistant asks multiple questions to determine eligibility, but does not ask for sensitive information. No entries are recorded.
MORE NEWS: Supply Chain Issues: How Global Shortages Are Affecting Consumers Nationwide
Originally published Friday, August 6 at 5:01 p.m. ET.
Denial of responsibility! Swiftheadline is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – firstname.lastname@example.org. The content will be deleted within 24 hours.