What families need to know about monthly child tax credit payments
Families will start receiving monthly child tax credit payments on July 15th.
LINCOLN, Neb. (KLKN) — Families will start receiving monthly child tax credit payments on July 15th.
Financial professional, Tim Kulhanek from Stonebridge Insurance and Wealth Management, says there are a number of things families need to know about the monthly payments.
What do families need to know about the monthly payments?
- Eligible families will receive up to $300 each month for each child under the age of 6 and up to $250 for each child between the ages of 6 and 17.
- These payments start to decrease for higher-income households, starting with single filers making more than $75,000 and joint returns of more than $150,000. A portion of the credit would still be provided to families with a single parent earning more than $200,000 or married couples earning more than $400,000.
- Payments are based on 2020 tax returns or 2019, if 2020 are not filed and processed.
- Families can also choose to opt out of the monthly payments and receive the tax credit as a lump sum next year when they file their return.
- If you want to find out how much your family qualifies for, Kulhanek has a child tax credit calculator on his website, stonebridgeiwm.com
When will families receive the payments?
- The IRS recently began sending letters to eligible families about the credit.
- The American Rescue Plan outlines that low- and middle-income parents can expect to receive $3,000 for every child ages 6 to 17 and $3,600 for every child under age 6.
- Half of the credit will be paid to families beginning July 15. The IRS will then deliver monthly payments on the 15th of each month through the end of the year.
- The remaining half will be a credit toward next year’s taxes
How significant is this child tax credit?
- Many are calling this measure a historic move to help reduce child poverty in America.
- Some researchers think the measure could reduce the child poverty rate nearly in half.
- Biden has called for extending the child tax credit increases in the American Rescue Plan through 2025, as well as making them permanently fully refundable.
- Having this sort of family assistance has been an initiative from many Democrats for years and is referred to often as something European countries have offered for years.
What are some smart ways families can use the child tax credit?
- The hope is changing the credit to a monthly payment will give families the money when it’s needed throughout the year to improve their children’s health and well-being.
- If your child needs new shoes or clothes, you won’t have to wait to replace them.
- The money could also improve the quality of food served to children. With money coming in monthly, you can buy fresh fruits and vegetables.
- You can even save money each month for college tuition or another big-ticket item for your child.