Not sure if your family qualifies for the expanded child tax credits that will start going out next month? The IRS now has a new online tool that allows taxpayers to check their eligibility.
Launched Tuesday, the Advance Child Tax Credit Eligibility Assistant can help American families quickly determine if they qualify for monthly payments of up to $300 per child by having them answer a simple set of questions, according to an IRS news release.
When using the tool, users should have their 2020 tax return on hand; however, if they haven’t submitted that yet, they can go off of their 2019 filing.
For those who don’t have a copy of their tax return but know their filing status, estimates can be made based on income statements like W-2s and 1099s, and the amount of expenses and adjustments to total income.
The tool then walks users through a set of questions, beginning with whether the taxpayer claimed the child tax credit on their 2019 or 2020 return, and whether they have established residency in the U.S. for more than half of that year.
If the user isn’t sure whether they claimed the child tax credit previously, they’ll be asked their tax filing status, the modified adjusted gross income from their latest tax return and the number of children they claimed for the credit.
Once completed, the tool lets families know if they qualify for advanced monthly payments of up to $300 per child under the age of 6 and $250 for each child aged 6 to 17. The total for the year is up to $3,600 and $3,000 respectively.
Taxpayers are eligible to receive the full amount if their income is $75,000 or less for single filers, $112,500 or less for heads of households, or $150,000 or less for married couples filing jointly, as well as qualified widows or widowers.
Those with incomes higher than those thresholds will get reduced amounts until they are phased out entirely, at $400,000 for married couples filing a joint return and $200,000 for all other filing statuses.
An estimated 39 million families are expected to receive the expanded credits, which are a part of the $1.9 trillion American Rescue Plan signed into law earlier this year.
The first batch is being disbursed on July 15, with monthly increments following over the one-year period.
However, the IRS is also allowing people to receive the payments as one lump sum when they filed their 2021 tax return instead of in monthly installments. Those who want the one-time infusion of cash can choose that option through the newly unveiled Child Tax Credit Update Portal.
Families may opt to use the unenroll feature if they no longer qualify for the expanded tax credit or believe they won’t be eligible once they file their 2021 return.
The password-protected online tool also allows users to confirm their eligibility, the release noted.
The portal will soon be updated with other features, including one that will allow taxpayers to check the status of their payments, according to the federal tax agency.
Beyond that, the IRS last week launched a non-filers tool that allows people who don’t normally file income taxes to provide the IRS with the basic information required for the child tax credits.
The most up to date information about the payments can be found at IRS.gov/childtaxcredit2021.