On July 15, the first payment from the new expanded child tax credit will be sent to some 39 million families with about 65 million kids, according to the IRS.
But were this started? The enhanced tax credit was established in March, when President Joe Biden signed the American Rescue Plan. For 2021, the maximum credit is $3,600 for children younger than age 6 and $3,000 for those between 6 and 17. Even though there has been months of preparation for families to become familiar about the credit, there’s still confusion about it, according to a recent survey by Ally Bank. Nearly half of those asked were not sure if they qualified, and one-quarter are unsure how to access the credit, according to the report.
The Internal Revenue Service is hoping to reach millions more low-income families as it starts to roll out the massive expansion of the child tax credit this week. Getting the funds to these households is crucial to the Biden administration and congressional Democrats’ goal to reduce child poverty nearly in half for 2021 through the beefed-up benefit.
Most parents don’t have to do anything to get the funds since the IRS already has their 2020 or 2019 returns showing they claimed the regular child tax credit, which was $2,000 for each child up to age 17 until this year. Roughly 39 million households, covering 88% of children, will start receiving the monthly payments automatically.
The IRS has sent more than 36 million letters to parents informing them of the enhanced credit and their potential eligibility. Eligible parents can get half their credit — up to $300 a month for each child under age 6 and up to $250 for each one ages 6 to 17 — from now through the rest of the year. They can claim the other half when they file their 2021 taxes next year.
ARTICLE: JENNIFER BARRETO-LEYVA
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: WDSU.COM