The $1.9 trillion American Rescue Plan that passed in March expanded the Child Tax Credit. For 2021, the child tax credit amount has increased from $2,000 to up to $3,600 annually for children under 6 and up to $3,000 annually for children ages 6 to 17. The credit is also now fully refundable. Beginning July 15, 2021, households with children will receive the payments monthly ($300 per child under 6 years old and up to $250 per child older than 6 years old). The tax professionals at Orlando, Florida based CPA Accounting & Tax Services outline what you need to know about the Child Tax Credit and determine whether or not your household is eligible to receive it.
1. Payments Are Direct Deposited: Most of the payments will be sent via direct deposit, while some may be sent as paper checks or as funds deposited on a debit card.
2. Eligibility: The Child Tax Credit will be sent to individuals making up to $75,000 a year, heads of households making up to $112,500 and those married filing jointly up to $150,000 a year.
3. Payment Options: The payments will be automatically sent to those eligible and parents need not do anything to receive the payments. Those who are eligible and prefer to receive the credit all at once when they file their income taxes will have the opportunity to opt-out of the advance monthly payments plan and take the entire credit on their 2022 tax return instead via a portal that has been set up on the Internal Revenue Service website: www.irs.gov
We can help navigate you through the new Child Tax Credit and other credits under the American Rescue Plan. Contact the professionals at CPA Accounting & Tax Services to help