The federal government has already distributed billions of dollars in stimulus payments to US taxpayers this year, as part of its continued response to the coronavirus pandemic. And this week, that effort continues. On Wednesday, a new child tax credit payment is due to be sent out once again — this being the third in a six-check series of monthly payments.
The same $1.9 trillion stimulus bill from March that funded a new round of $1,400 stimulus checks is what made this week’s payment possible. The six-check series actually started in July and will continue through December. But it’s a little different from the one-and-done $1,400 checks. So let’s break it down and take a closer look at what this effort entails. And, more important, who the recipients will be.
New child tax credit payment September 15
The child tax credit is actually one single amount of money that parents of eligible children can get. It usually comes in the form of a tax credit. When you file your federal taxes, this benefit can lower your overall tax obligation.
This year, Congress did two things. It expanded the maximum benefit amount from $2,000 to $3,600. But instead of making families with eligible children wait until next year to claim that amount on their taxes — making them wait a whole year, in other words, to benefit from this tax credit — Congress also decided to give people half of their amount as an advance payment. Spread out over six payments, actually. The second half of the full credit, parents will get when they file their taxes.
The third of those six payments is what’s coming on Wednesday. So, who’s eligible for it?
Eligibility, and more details
For every child a parent has under the age of six, they’ll get $300 each month through December. For children between ages six and 17, the monthly check amount will be $250.
There is an income threshold to know about. Families with an adjusted gross income in 2019 or 2020 or less than $75,000 for single parents get the full credit. Same for married couples filing jointly who make no more than $150,000. The expanded credit phases out completely for individuals making $95,000 or more. It also phases out completely for couples making $170,000 or more. However, those taxpayers would still be eligible for the normal child tax credit.
After Wednesday, there will be three more of these monthly checks. They’re scheduled for October 15, November 15 and December 15.
If you want to double check whether you’re set up for paper checks or direct deposits? Visit the IRS Child Tax Credit Update Portal. The IRS is also planning to mail out a year-end summary (Letter 6419) that taxpayers should watch out for. Because they’ll need to use it when filling out their 2021 federal income tax return next year.
“This is important because, for most families, the advance payments they are receiving during 2021 cover only half of the total credit,” the IRS says. “They will claim the remaining portion on their 2021 tax return.”