What is the IRS Child Tax Credit? Beginning in July, the IRS will be sending letters to over 36 million families. These letters will explain how they may qualify for the monthly Child Tax Credit payments. The Biden administration and Congress brought up these payments. The American Rescue Plan, passed back in March, includes the Child Tax Credit (CTC). Initially, families were receiving up to $2,000 per child under the age of 17, at the end of the year. This new law will issue qualifying families monthly payments that total up to $3,000 for families with children ages 6-17; $3,600 for families with children under 6 years of age.
Experts estimate the cost of this program to be around $391 million. It also required the IRS to create an entirely new structure that enable delivery of benefits to Americans. The basis of qualification will come from information on family’s 2019 or 2020 tax return. Those who registered as Non-Filers for Economic Impact Payments issued in 2020 and early 2021 will also be included in this.
The CTC payments, ranging from $250 to $300 per month, are scheduled to be issued via direct deposit or check on:
For those that already filed your 2020 tax return or registered for EIP, you do not need to take any further action to receive these payments. If you haven’t filed a 2020 tax return yet, the IRS will use your 2019 return in this case. If you haven’t filed either year and believe you would qualify for this program, it is imperative you file as soon as possible. Individuals who don’t normally file a tax return are also encouraged to sign up with the IRS to determine eligibility. This includes homeless, severely poor or other underserved communities.
If you need help filing a tax return, reach out to us today.