When the most recent coronavirus stimulus bill passed, it didn’t just include $1,400 checks. It also created an expanded Child Tax Credit, which will result in millions of parents receiving a lot of money from the government very soon.
The funds from the expanded Child Tax Credit weren’t made available right away, unlike the $1,400 direct payments. The estimated date for the first payment was set for July — and that day has finally arrived. The IRS will begin distributing payments today, July 15, 2021.
Here’s what you need to know about the upcoming stimulus money.
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Stimulus payments to be deposited starting today
The American Rescue Plan provided for an expansion of the existing Child Tax Credit. While the credit used to be worth $2,000 — only $1,400 of which was refundable — it’s now worth:
- $3,600 for children under age 6
- $3,000 for children between the ages of 6 and 17
The full amount of the credit is now refundable, which means families who don’t pay that much in taxes are still eligible for the full $3,600 or $3,000. And the credit is per child, so a parent with two children over the age of 6 would be entitled to $6,000 and a parent with three would be entitled to $9,000 and so on.
The other major change is that families will no longer wait to file taxes in order to get the credit. Instead, the IRS will be making payments of either $250 (for kids ages 6 to 17) or $300 (for kids under 6) each month from July to December. Parents will end up getting half their credit up front during the year — and the first of those payments will be sent to people’s bank accounts on July 15.
Are you eligible for a payment?
Parents will qualify for the full extended Child Tax Credit with an income of up to $75,000 for single tax filers and $150,000 for married joint filers. For people who have incomes above those limits, the payment phases out at a rate of $50 per $1,000 in extra income.
For single taxpayers with incomes above $95,000 and joint filers with incomes above $170,000, eligibility phases out entirely.
With these income limits, the IRS indicates around 36 million households are in line for a payment.
When will you get your money?
If you are one of the eligible families in line for an expanded Child Tax Credit, the agency could deposit your money today — although it may take several days for the money to actually show up as being available in your account.
If the IRS doesn’t have your bank information, they’ll be mailing out checks.
The IRS will also be distributing additional payments via direct deposit (or check) starting on:
- Aug. 13
- Sept. 15
- Oct. 15
- Nov. 15
- Dec. 15
The expanded Child Tax Credit is currently in effect only for 2021, although lawmakers on the left are pushing to make the payments permanent.
View more information: https://www.fool.com/the-ascent/personal-finance/articles/stimulus-update-irs-depositing-payments-today-but-the-money-may-not-be-available-immediately/