As of July 15, nearly 40 million families will receive payments from the enhanced child tax credits. The tax credit falls under March 2021's American Rescue Plan. For 2021, the maximum child credit is $3,000 for children 6-17, with an added $600 for children under 6. There are several key factors and implications to this new credit.
Here's what you need to know:
There are no limits to how many children can receive the credit per family.
While many families will be eligible for this additional credit, there are income limits.
Generally speaking, couples who jointly file with an income less than $150,000 or individuals with an income less than $75,000 will receive the full credit.
You can calculate your eligibility using this online calculator.
Even if you are not eligible for the additional credit, you will still receive the regular child tax credit of $2,000.
If you have filed your taxes, you will not need to do anything. Nonfilers who registered family members for the stimulus payments will also be automatically enrolled.
You can find out your eligibility status using the Child Tax Credit Update Portal.
Most monthly payments will be sent by direct deposit, on the 15th of each month (except for August, where payment will be sent on the 13th).
You can opt out of the monthly payment through the Portal, if you would prefer your credit to come in one lump sum when you file your taxes. While it is too late to opt out of July's payment, you can still opt out of payments for August through the end of the year.
Curious if you should opt out or accept the monthly payments? Read "Why some families may want to opt out of the child tax credit payments starting in July" to evaluate your options.
Questions about the enhanced tax credit? Contact the Robin S. Weingast & Associates Team and we'll walk you through your options.