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The IRS has confirmed that families can expect their child tax credit to be paid out immediately in 2021 Advance payments in Julyrather than as part of a tax return next year. Monthly payments have also increased from a maximum of $ 2,000 to a maximum of $ 3,600 per child. Here’s what to expect and how to qualify for this stimulatory loan.

Why do monthly payments start in July?

The Child Tax Credit is a tax break for families with children. For 2021, under the American Rescue Act, these payments have been increased to a maximum of $ 3,600 per child. In particular, it is a refundable credit that is paid out as a monthly cash payment for six months starting in July. However, when the bill was passed it was not clear The IRS was equipped to process monthly payments at all. Yesterday, IRS Commissioner Charles Rettig confirmed to Congress that the agency is now ready to send out checks this summer.

This means that families eligible for the child tax credit will receive six monthly payments in 2021, which arrive from July through December. The second half of the total annual loan can be applied for when families file their 2021 tax returns in 2022.

How do I qualify?

Both eligibility and the amount you receive depend on your 2020 household income and the ages of your children. For the 2021 tax year, families will receive credit of up to $ 3,600 for each child under six and $ 3,000 for each child under 18, up from the previous credit of up to $ 2,000 per child under 17. Children who are 18 years old who are also considered dependent, as well as full-time college students 19 to 24 years old, also qualify, but only for $ 500. per CNET.

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However, these payments have built-in exit options, meaning you will pay out less if your 2020 gross adjusted income is more than $ 75,000 for a single parent or $ 150,000 for a married couple that applies together (you lose $ 50 in credit for every $ 1,000 of income above the threshold, for WSJ). Check this out to see how much you might qualify for below this threshold Tax calculator for child tax (which for some reason doesn’t include estimates for children over 17).

Pro CNETThere are a few other admission requirements:

  • The child you are claiming must live with you for at least six months a year.
  • Both you and your child must be US citizens.
  • For married couples filing together, at least one spouse must have a Social Security number or an ITIN, Powell said.
  • The child must also have a social security number – one child with Only one ATIN does not qualify (This includes adopted children.)
  • Parents who share custody of a child cannot both receive the tax credit.

Since this is a limited time credit for the 2021 tax year, you will need to file a 2020 tax return at least for now, as this is currently the only way to prove to the IRS that your child is eligible for a tax return on the loan.

The IRS will set up an online portal for income adjustments

These payments are technically an advance based on your planned income and the number of children you now have. However, both of them may change for you later in the year. It is for this reason that the American Rescue Plan requires the IRS to set up an online portal where you can update your income, marital status, and the number of qualified children. The portal, which is expected to launch on July 1, will issue and track payments and match the payments with the taxpayer’s credit in the tax returns.