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Letters detailing monthly child tax credit payment plans are being sent to some 36 million American families, according to the Internal Revenue Service.
The letters come from the IRS and the Treasury Department and notify recipients that they may be eligible for monthly payments. If the taxpayer wishes to receive the payments, no action is necessary. If they don’t, instructions on how to opt out of payments will be provided by the end of June, the IRS said.
“The US bailout, enacted in March, made significant changes to the CLC for most taxpayers in 2021,” the letter said. “Credit amounts have increased for many taxpayers, and the credit is fully refundable, which means taxpayers can claim the credit even if they don’t owe income tax.
Expanded child tax credit allows families to receive an annual benefit of $ 3,000 for each child aged 6 to 17 and $ 3,600 for each child under age 6 for the tax year 2021. Eighteen-year-old students and full-time students 24 and under will be eligible for a one-time payment of $ 500.
Payments will be made monthly in installments of $ 250 or $ 300 starting July 15 and then at the same time each month until December. The remainder can be claimed as a credit against the 2021 taxes when they are deposited in 2022. The money will arrive by direct deposit or paper check.
According to the IRS, eligible children must live with the taxpayer for more than half of the year. The maximum credit is available to taxpayers whose adjusted gross income is $ 75,000 or less for a single taxpayer; $ 112,500 or less for the head of the family; or $ 150,000 or less for married couples who file a joint tax return. The maximum credit is gradually disappearing for high-income households.
Income levels are determined by information from the 2019 or 2020 federal income tax returns.
The IRS said a second letter would be sent to eligible families in the future detailing the estimated amount of their monthly payments.
