HOUSTON - The IRS started sending out child tax credit payments today. The payments are part of President Biden's American Rescue Plan, which expanded the child tax credit and made it refundable. 36 million families will be getting these monthly payments.
We know you have questions. Here are answers from the White House and IRS.
First, let's talk about how much you could receive. The child tax credit was increased to $3600 for children under age 6, and $3000 for children ages 6 to 17. Starting July 15, parents and guardians will get monthly payments of $300 for each child under 6, and $250 for each kid ages 6-17. Payments will be monthly through December. You can claim the balance as a tax credit when you file your tax return next year.
Parents or guardians who earn up to $150,000 married filing jointly, or up to $112,500 for the head of household.
But married couples who make up to $400,000, and single parents earning up to $200,000 still qualify for the original $2000 child tax credit, which will result in $166 per child.
When will payments arrive?
The IRS is sending out payments on the 15th of each month, July through December. If you received your tax refund or stimulus through direct deposit, you should get your child tax credit through direct deposit. It may take a few days for banks to distribute the money into accounts, but accounts should show a pending amount labeled ChildCTC. If the IRS doesn't have your bank account number, you'll get a paper check, which will take a couple of weeks.
What if the IRS doesn't have your correct bank account information?
If you need to give the IRS your direct deposit information, you didn't file a tax return, or just want to update something, you can do it through a tool on ChildTaxCredit.gov. You will need social security numbers for yourself and your kids, and if the IRS gave you a PIN number this year, you'll need that.
How will I know if I am going to receive payments?
The IRS will send you two letters. One that states your eligibility. One that has your estimated payments.
What if I don't receive expected payments or if I'm late enrolling?
Everyone who signs up and is eligible will get the payments. When your monthly payments begin, they'll be larger to make up for payments missed. If you never receive any payments you're owed this year, you can claim them when you file your tax return next year.
Can I check the status of my payments?
Yes, click on Manage Payments on ChildTaxCredit.gov. You can check if you're enrolled, update your bank account information, or unenroll if you'd rather get the full credit on your next tax return. You can also click on the Eligibility Assistant to see if you're eligible.
How do payments work for divorced parents, or a guardian, like a grandparent?
The credit will be based on the parent or guardian that claims the child as a dependent on their 2020 or 2019 tax return. For parents who alternate years of claiming the child, the payments will not be split. You'll have to split it amongst yourselves. If you're a guardian and you claim the child as a dependent, you can receive the credit.
What if I just had a baby this year?
Baby qualifies. You can update the IRS with that information through ChildTAxCredit.gov.
What if my child turns 18 this year?
If your child turns 18 before the end of this year, that child is not eligible for this credit. But you can claim a $500 tax credit for dependents ages 18 - 24 when you file your 2021 tax return.
Can the money be garnished?
It cannot be garnished to offset back-owed federal or state taxes or government debts. But it can be garnished for private back-owed debts, such as medical bills or credit cards.
Will this affect my Social Security, SNAP or WIC benefits?
No, it's not considered income. It's a tax credit.
What if I only claimed the original $2000 child tax credit on my tax return this year?
You don't need to file another return. The IRS will give you full credit for the increased child tax credit.