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The kid tax credit score goes to households from July. Right here's the way to get yours.

President Joe Biden announced Monday that families will have access to expanded childcare services starting July 15.

The expanded child tax credit was passed into law in March as part of the US rescue plan. Similar to the business cycle reviews of this law, half of the extended benefits will be distributed as a direct payment of up to $ 300 per month per child to eligible parents for six months (with the other half awarded in 2022). Overall, Biden's plan increases the annual child tax credit from $ 2,000 to $ 3,600 for children under 6, and from $ 2,000 to $ 3,000 for children 6-17 years old. Families have the option of accepting the tax credit in monthly amounts – and it will be fully recoverable, meaning that even families who don't make enough money to pay income tax will get it.

The vast majority of children – around 88 percent according to the IRS – will be covered by the improved benefits, and it is estimated that the $ 110 billion program, which is currently expiring after a year, is expected to cut child poverty in half. There is some effort to be made to extend the benefit, including a plan by Sen. Mitt Romney (R-UT), but currently there is little evidence that these proposals could become law. Biden plans to fund an extension through 2025 in his American Families Plan, a $ 180 trillion proposal for social infrastructure that is currently on its way through Congress.

In total, the households of more than 65 million American children can expect to receive a portion of that $ 110 billion. Find out here if you are eligible and when to expect money.

Who Is Eligible for the Child Extended Tax Credit?

The short answer: Almost every household with a child under the age of 18.

But it is not that simple. Income restrictions exist for individual, joint and household heads.

Individual applicants with an Adjusted Gross Income (AGI) of $ 75,000 or less are eligible for full credit. Individuals with an AGI between $ 75,000 and $ 147,000 (for children under 6 years old) and $ 75,000 and $ 135,000 (for children 6 to 17 years old) are eligible for partial benefit.
For a married couple filing an application together, the AGI limit is $ 150,000. Those with an AGI between $ 150,000 and $ 222,000 (for children under 6) and $ 150,000 and $ 210,000 (for children 6-17) are eligible for some cash.
For Head of Household Filers, only those with an AGI less than $ 112,500 can receive the maximum benefit. And those whose AGI is between $ 112,500 and $ 184,500 (for children under 6) and $ 112,500 and $ 172,500 (for children 6-17) are eligible for a partial benefit.
If your income level means you don't typically file taxes, you get the full benefit. (Note that you will need to file a 2020 tax return to demonstrate to the IRS that you are eligible for 2021 credit.)

Partial benefits are calculated as follows: For every $ 1,000 additional income above the threshold for all applicants, the child tax credit is reduced by $ 50. So, if a married couple filing an AGI together reports an AGI of $ 155,000 in the year eligibility was determined, the total payment for their 4-year-old daughter will be reduced by $ 250, even though it does continue to qualify for the remaining $ 3,350.

Eligible households receive a separate child tax credit for each eligible child. A single applicant with three children under the age of 6 could receive $ 10,800 by next spring, provided their reported income falls below the qualification limit.

Do I have to do anything to get my credit?

Payments are based on an applicant's 2020 tax return. If this has not been submitted or processed, the IRS will use the 2019 tax return as a substitute.

The IRS is setting up two online portals to reach low-income families who normally do not pay taxes. The first is similar to the form used for stimulus payments in 2020. This allows filers to submit their family and income information and then claim any stimulus payments they may have missed since the pandemic began.

The second IRS portal allows filers to update important information such as address, income and family size – all important indicators of how much money can be expected from the extended child loan.

Can I choose how often I get the credit?

Yes. There are two ways to get the credit: as a lump sum distributed in 2022 after filing your 2021 tax return, or as six monthly prepayments from July to December and the rest in 2022. Families can use this second portal to view this which option you prefer.

Every family that is entitled to payments will receive at least part of the extended loan in a lump sum early next year. However, filers can choose to receive half of that money as early as July, with payments arriving around the 15th of each month. Families who choose the monthly option will get the rest of their balance in 2022 after filing their taxes. Those who go the other way will get the full amount in 2022.

For example, for families with one child under 6, this means they could receive either $ 300 per month for six months (starting in July) and an additional $ 1,800 early next year, or the full $ 3,600 in 2022. However, families with a child over 6 years younger than 17 could receive $ 250 per month for six months and an additional $ 1,500 in 2022.

When do I get my payment?

Most families who choose to receive the balance in the form of monthly payments will receive the first balance from the IRS by direct deposit on or about July 15th. (If your direct deposit information is not on file with the IRS, you will be given either a prepaid paper check or a debit card, although it could arrive a little later than the 15th). Payments will continue to be received by the middle of the month, except on weekends and federal holidays through December.

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