The IRS has started contacting millions of potentially eligible families by mail regarding expanded child tax credits, which are slated to begin going out next month, federal officials said Monday.
Based on tax returns, more than 36 million families may qualify for the newly advanceable payments, according to an IRS news release. The child tax credits were authorized by Congress and signed into law by President Joe Biden as part of the nearly $2-trillion coronavirus relief package in March.
Those who are eligible will then get a second letter with an estimate of their monthly payment prior to July 15, when the first child tax credits are scheduled to be disbursed.
Families who qualify will receive up to $300 per month for each child under the age of 6, and $250 per month for each child between the ages of 6 and 17, according to the IRS. That brings the maximum total for the year to $3,600 per child under the age of 6 and $3,000 per child between the ages of 6 and 17.
Previously, families could get up to a $2,000 tax credit per child, and 17-year-olds did not qualify.
Also new for 2021: the entire credit is fully refundable, even for those who don’t owe any federal income tax.
Taxpayers will get the full amount if they meet one of the following modified adjusted gross incomes:
- $75,000 or less for singles
- $112,500 or less for heads of households
- $150,000 or less for married couples filing jointly, as well as qualified widows or widowers.
Taxpayers with higher incomes can still qualify for the child tax credits, just at reduced amounts.
How much someone receives is based on information from either their 2019 or 2020 federal income tax income, or data from the IRS’s non-filers tool that people used to register for COVID-19 stimulus checks.
On top of July 15, payments are being sent out on Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15, with delivery either by check or through direct deposit, depending on what information the tax agency has on file.
However, those who want to receive the funds all at once when they file their 2021 taxes will eventually have the option to unenroll from the monthly payments through an online tool that will be added this summer to the IRS’s website.
Those who qualify for the tax credit but haven’t filed their 2020 or 2019 return yet are urged to do so to receive the advance payments, even if they don’t normally file one, according to the IRS. This can be done through the agency’s Free File system.
For the most up-to-date information about the 2021 child tax credits, visit IRS.gov/childtaxcredit2021.