IRS says the first payment from the new expanded child tax credit will be sent to 39 million families with 65 million kids.
New York: Beginning July 15, eligible families will begin to receive monthly Child Tax Credit payments, Congressman Tom Suozzi wants people to know. “I am proud that I helped pass the American Rescue Plan legislation,” he says.
The full payments are available for a single parent making up to $75,000 or joint filers making up to $150,000 per year. The credit phases out by $50 for every $1,000 of income over the $75,000 for individual filers and $150,000 for joint filers.
The American Rescue Plan increased the existing Child Tax Credit for this year from $2,000 per child to $3,000 per child over the age of six and $3,600 for children under the age of six. The plan also raised the age limit of the credit from 16 to 17. Older children age 18, and full-time college students aged 19 to 24, also qualify for $500.
Beginning on Thursday, July 15, qualifying families will receive $300 a month per child for children ages 0 to 5 and $250 a month per child for children ages 6 to 17. Monthly payments will continue through December 15.
According to the IRS, the first payment from the new expanded child tax credit will be sent to some 39 million families with about 65 million kids.
The monthly child tax credit payments will help many struggling families make ends meet. These advance payments, however, come with a caveat. Every advance dollar that a family or individual receives will reduce the amount of the Child Tax Credit you can claim on your 2021 tax return. That means that by accepting the monthly child tax credit payments, the amount of your federal tax refund may be reduced or the amount of tax you owe may increase.
For this reason, Congressman Suozzi advises, “I am urging families that do not wish to receive these advanced monthly payments, and would rather apply the credit to their 2021 taxes at the end of the year, to take steps to unenroll from the advanced payments with the IRS. The July payments are already set to go out. If you wish to opt-out of the August payment, you must do so by August 2nd.”
If you would rather receive a lump sum credit as part of your 2021 fed tax return instead of the automatic monthly payments, please go to the IRS website.
As of now, the expanded federal Child Tax Credit only applies to 2021, but there have been bipartisan calls to extend it through 2025 via the American Families Plan, which is being debated in Washington now.