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For some, the monthly checks that the Internal Revenue Service (IRS) is preparing to send in advance starting July 15 to millions of families in the United States will be like stimulus checks since they are direct payments that recipients will be able to use. as you wish.
The foregoing is just one of the similarities between the scope of the so-called “Economic Impact Payments” approved by the Federal Congress and the extension of the “Child Tax Credit” (CTC), both part of the “American Rescue Plan” of the Biden Administration.
The same income levels apply for eligibility
Another similarity specifically between the third $ 1,400 stimulus check and the CTC is that, in both cases, the IRS uses the same income eligibility criteria to set the payment amount.
Such information the agency obtains it from the tax return of the potential beneficiary, either 2019 or 2020.
Under the income eligibility rules for both the third stimulus check and the extended CTC, the amount per family begins to decrease for single people, starting at $ 75,000 in income; $ 112,500 or more for heads of household and $ 150,000 or more for married couples as well as qualified widows and widowers.
That is, if the taxpayer or taxpayers earn one of the aforementioned figures annually or less, they are creditors of the full payment under the credit.
But if your income exceeds those amounts, the IRS begins to apply the gradual reduction of the payment down to zero.
“For most people, the modified AGI is the amount shown on line 11 of your 2020 Form 1040 or 1040-SR. Above these income thresholds, the additional amount above the original credit of $ 2,000 Either $ 1,000 or $ 1,600 per child is reduced by $ 50 for every additional $ 1,000 in modified AGI, ”the agency explained in an entry on its website.
This is the same adjustment that applies to the third stimulus check still distributed by the IRS.
Monthly payments under the credit will be deposited or sent by mail
A third similarity between stimulus checks and the new extended credit program is that the funds will be sent either by direct deposit or by mail.
“To make sure families have easy access to their money, the IRS will issue these payments by direct deposit, as long as the agency has the correct banking information available. Otherwise, people must be aware of their mailbox from July 15 since the payment will arrive by mail, “said the agency.
As for the third stimulus check, some people received payment in the form of a prepaid debit card (EIP Card). This will not be the case for recipients of the “Child Tax Credit” extension.
Dates for sending payments under the CTC
Due dates for Child Tax Credit advance payments are July 15, August 15, September 15, October 15, November 15 and December 15.
For the third stimulus check, the statutory deadline for the IRS to complete deliveries is December 31.
At the moment, the agency is focused on processing payments to late filers, in some cases because they usually do not file low income taxes; and to people who were made an initial payment based on the 2019 return but then the IRS received the 2020 return and had to adjust the amount (“plus-up” or additional payments).
The “American Rescue Plan”, approved last March in the United States Congress increased the maximum Child Tax Credit this year to $ 3,600 for children under 6 years of age, and to $ 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.
The IRS will begin sending monthly advance payments from the CTC starting July 15 of between $ 250 and $ 300 for each child.
Non-filers tool for low-income families to claim money for the credit
This week, the IRS announced the launch of the Non-filer Sign-up service, similar to the one that was launched last year following the approval of CARES Act for $ 1,200 Stimulus Checks. The application was designed for low-income people who are not required to file taxes as a way to obtain the information necessary to process payments.
“This tool, an update to last year’s IRS Non-Filers tool, is also designed to help eligible individuals who do not normally file tax returns sign up for the third round of Economic Impact Payments of $ 1,400 (also known as Stimulus Checks) and claim the Refund Recovery Credit in any amount of the first two rounds of economic impact payments that they have not received, ”detailed the IRS.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.