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. These payments were brought up by the Biden administration and Congress. The Child Tax Credit, or CTC is part of the American Rescue Plan passed back in March. 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.
The cost of this program is estimated 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. This will also include those that registered as Non-Filers for Economic Impact Payments that were issued in 2020 and early 2021.
The CTC payments will range from $250-$300 per month and are scheduled to be issued, via direct deposit or check, on:
- July 15
- Aug 13
- Sep 15
- Oct 15
- Nov 15
- Dec 15
If you’ve already filed your 2020 tax return or registered for EIP, you do not need to take any further action to receive these payments. In the case there is no 2020 tax return filed yet, your 2019 return will be used. 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.
IRS CTC payments in explained:
If you need help filing a tax return, reach out to us today.