Photo: Migdalia Fernández / La Prensa
Millions of American families are already receiving the letter from the Internal Revenue Service (IRS) alerting them to eligibility for monthly advance payments under the Biden Administration’s “Child Tax Credit” (CTC) extension.
The notice was sent this week by the IRS to about 36 million households, which is equivalent to 92% of families with children in the United States or approximately 65.6 million children in the country.
According to a sample letter released by CNET this week, the document reports that the recipient may be eligible for prepayments on the credit that the IRS will begin to disburse on July 15.
“If you are eligible for CTC advance payments and you want to receive these payments, you do not have to take any further action. You will receive a letter with more details ”, the letter begins.
The notice then notes: “The ‘American Bailout Plan’ signed into law last March made important changes to the CTC in 2021 for most taxpayers. Credit amounts have increased for many taxpayers, and the credit is fully refundable, which means that taxpayers can benefit from the credit even if they don’t owe taxes. The credit also qualifies minors who turned 17 in 2021. The ‘American Rescue Plan’ directs the IRS to issue monthly advance payments for an estimated half of the annual credit. The IRS will send the payments between July and the end of this year ”.
The letter also details the income levels for eligibility that are the same as the IRS applied to calculate the amount of the third stimulus check.
Recipients can request a one-time payment next year
The written notice ends with a clarification from the agency for people who do not wish to receive the monthly payments and prefer a single, one-time payment next year in the taxable season.
“If you are not interested in receiving advance payments from the CTC, instructions on how to sign up for these payments will be available at the end of June. Please keep checking http://www.irs.gov/childtaxcredit2021 for additional information on these payments advanced by CTC ”, the agency points out.
The IRS is about to launch two portals for eligible Americans to update their family status as well as the number of dependents, among other actions.
Eligible families will receive a second letter from the IRS
The second letter mentioned in the IRS notice refers to a personalized one with an estimate of your monthly payment.
Payments as of July 15, will be made by direct deposit or paper check, in the case of people who did not provide their bank details to the agency. “The payment will be up to $ 300 per month for each qualifying child under age 6 and up to $ 250 per month for each qualifying child ages 6 to 17. The IRS will issue advance payments of the Child Tax Credit on July 15, August 13, September 15, October 15, November 15 and December 15, ”the office states on its website.
The IRS encourages families and individuals who have not yet filed their 2020 or 2019 return to do so as soon as possible so that they can receive any advance payments under the credit.
“Filing early will also ensure that the IRS has your most up-to-date banking information, as well as key details about eligible children. This includes people who normally do not file a tax return, such as homeless families, poor people in rural areas and other underserved groups, ”the entity listed.
The third stimulus bill increased the maximum Child Tax Credit this year to $ 3,600 for children under 6 years of age, and $ 3,000 for each child between the ages of 6 and 17. Before 2021, under the CTC, families could get a maximum of $ 2,000 per qualifying child, while 17-year-old dependents were not eligible.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.