Eligible parents will start receiving payments for the advance child tax credit next month

PROVIDENCE, RI (WPRI) – In just a few weeks, the Internal Revenue Service (IRS) will begin sending monthly child tax credit payments ahead of 2021 tax season.

Those who are eligible for the withholding tax credit for children will start receiving their payments as of July 15, according to the IRS.

“It helps these low-income families,” said Amy Lins, senior director of corporate learning at Money Management International (MMI). “The reimbursable nature of that helps these families with things like child care, it helps them, you know, with food in the household.”

The child tax credit is nothing new, but it has been changed as part of the US bailout, including an advance for 2021.

“It increases the tax credit according to the age of the child and it allows parents to receive up to half of it in monthly installments by the end of the year,” explains Lins. “It created the advance, which means you get it now rather than when you file your taxes in 2022, up to 50% of it.”

Earlier this month, the IRS started sending letters to over 36 million Americans who could qualify based on their most recent tax returns.

Lins said those who don’t report taxes are still eligible, and the IRS recently added a link to a website to help those who fall under this bracket.

“If they’re not filing, they can click that button and provide that information to the IRS to enable them to receive this refundable tax credit,” she explained.

Those who are eligible for the withholding tax credit for children on the basis of a modified adjusted gross income (AGI) include:

• A single person earning $ 75,000 or less
• Heads of Households Earning $ 112,500 or Less
• Couples who file a joint tax return of $ 150,000 or less
• Widowers

“Parents also have an option, if they don’t want to receive it in the monthly installments, that 50% they can opt out,” Lins said.

The American Rescue Plan also raised the maximum tax credit and increased the age limit:

• Each child under the age of six will be eligible for a tax credit of $ 3,600
• Each child aged 6 to 17 will be eligible for a $ 3,000 tax credit

According to the IRS, the entire credit will now be fully refundable, “even if they owe no federal income tax.” Before 2021, only $ 1,400 was reimbursable per child.

The IRS has created a page specifically for the withholding tax credit for children.

“I expect there will be a lot more instruction on the site on what people can and cannot do,” Lins said.