The first child tax credit payments have been sent — giving American families an extra bump in their bank accounts amid the coronavirus pandemic.
Were child tax credits sent out?
The Internal Revenue Service and the Treasury Department said Wednesday that tens of millions of American families will receive their first payments in the child tax credit payment, CNN reports.
- The payments will provide added relief to families through the end of the year.
The child tax credits are a part of the American Rescue Plan — the $1.9 trillion coronavirus relief bill that passed Congress in March. That plan also included the stimulus checks that were sent out to Americans in March.
Who qualifies for the child tax credit payments?
According to The Washington Post, American families who make $75,000 or less combined will qualify for the new payments for families. However, the amount for the tax credit will diminish for families who make more than $75,000.
How much money do you get?
Per Business Insider, families can earn up to $3,000 total for children who are between 6 and 17 years old. Families will earn $3,600 for children under 6 years old.
How much money do you get per month?
The payments will be distributed from July until December. At most, families can earn $300 per child, according to the Deseret News.
- Families will earn $300 per month for every child who is 5 years old and younger.
- Families will receive $250 for every child who is between 6 and 17 years old.
Will this impact your 2022 taxes?
Maybe. According to CNBC, the payments are based on data from the IRS, which uses your income, marital status and number of children from your 2020 tax return. If any of your information changes in 2021, then you may have to pay back some amount in 2022 when you receive your tax bill. That said, you might also be owed money if your status changes.
- “It would reduce your refund or increase your tax payment next April,” April Walker, lead manager of tax practice and ethics at the American Institute of Certified Public Accountants, told CNBC. “That’s how it would be paid back.”