IRS opens online tool to register for the monthly Child Tax Credit payments
Non-filing families can now register for monthly child tax returns (CTC) payments through the Internal Revenue Service's online portal.
"Our goal at the Treasury is to make sure that every American gets the aid they need as easily as possible," Treasury Secretary Janet Yellen said in a statement Monday. "We know working families can't postpone paying doctor visits or grocery bills, and this new tool will help more people get their tax credit every month starting in July."
The US $ 1.9 trillion bailout plan passed in March includes a one-year extension of the CTC that increases the loan amount and allows it to be distributed in regular advance payments starting July 15.
The tool enables Americans to provide information about themselves and their qualifying children, as well as enter their direct deposit information where these monthly deposits can be made. Eligible persons who did not file their 2019 or 2020 tax returns or who did not use the IRS Non-Filers Stimulus Check Tool should use the tool.
Individuals must provide the following in order to use the tool:
Current Email Address
Date of birth
Social Security Numbers (or other taxpayer IDs) for you and your loved ones
Bank account number, type and bank code, if available
Identity Protection Personal Identification Number (IP PIN) that you received from the IRS earlier this year, if you have one
The maximum credit in 2021 is $ 3,600 for children aged 6 and under and $ 3,000 for children aged 6-17. Previously, the maximum tax credit was $ 2,000 per child under the age of 17. The six monthly prepayments will be sent out on July 15th and August 13th, October 15th, 15th, November 15th and December 15th.
Here's what else you need to know about monthly payments.
Photo: Getty Creative
How much will my payment be?
Eligible households will receive half of their total payments in advance over the next six months, starting in July and ending in December. Monthly payments are $ 250 for older children and $ 300 for children under 6 years of age.
The amount will be determined in the 2020 tax return. If this return is not available, the IRS will use your 2019 return.
A submitter with children under 17 who earn up to $ 75,000 will receive full payment for each child, while those who earn up to $ 90,000 will receive a reduced amount. Joint applicants with children up to $ 150,000 receive full credit for their child, while those earning up to $ 170,000 receive a lesser amount.
Single filers earning more than $ 200,000 and joint applicants earning more than $ 400,000 are eligible for the legacy credit, which is $ 2,000 per child under the age of 17.
U.S. President Joe Biden signs the American Rescue Plan, a package of economic relief efforts to respond to the effects of the coronavirus disease (COVID-19) pandemic, in the Oval Office of the White House in Washington, USA, on March 11, 2021 . REUTERS / Tom Brenner
Who is Eligible?
The IRS will use your federal tax return and 2020 income to determine if you are eligible for credit. The prepayments are equal to half of the total credit of an eligible household, while the remaining half of the credit can be claimed on your 2021 tax return.
The payments would be made to eligible taxpayers who have had a primary residence in the United States for more than half a year.
The CTC has also been made fully refundable, which allows taxpayers to receive the credit as a refund, even if it is worth more than they owe in taxes.
Households with approximately 65 million children - or 88% of US children - will be eligible, the Treasury Department said in May. Payments are made by direct debit, check or debit card.
What do I have to do to get the loan?
Most taxpayers should not take any action other than filing their 2020 tax return to apply for the credit if they have not already done so.
Read more: Taxes 2021: Credit, deductions and tax relief for student loans and tuition fees
Additionally, eligible taxpayers who do not wish to receive advance payments for 2021 can opt out of receiving the monthly payments, but the IRS is yet to detail how to do so.
House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer demonstrate the American Rescue Plan during the enrollment ceremony following the passage of the $ 1.9 trillion Coronavirus Disease Act (COVID-19 ) by US President Joe Biden on Capitol Hill in Washington. USA, March 10, 2021. REUTERS / Erin Scott
Can the loan become permanent?
As part of his American family plan, President Joe Biden suggests extending the CTC's expansion until 2025. He has previously said that the government is keen to make the performance permanent.
Some legislators also advocate permanent expansion of the CTC and the expanded Earned Income Tax Credit (EITC).
"We must not allow these critical extensions to expire after a year," wrote 40 Democratic senators in a letter in March. “This would lead to a significant rise in child poverty now that we have taken historic steps to end it.
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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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