As the May 17 tax deadline approaches, there is a change that will mean more money in parents’ pockets. The 2021 child tax credit is increased courtesy of the US bailout. And on top of that, you will receive the money from the IRS starting in July.
This is what is different from previous years when you claim the child tax credit. If your child is aged 6 to 17, and yes, 17 is included this time, then you could get a child tax credit of up to $ 3,000 per child. If they are 18, there is nothing. Under 6, and up to $ 3,600 per child.
Half will come to you this year as a monthly distribution in the form of checks or direct deposits from the IRS from July to December 2021. The second half, according to a tax expert we inquired with, will come as a lump sum. unique.
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Thus, you could receive for a child aged 5 and under up to $ 300 per month for six months. From 6 to 17 years old, you could get $ 250 per month. Babies born in 2021 are included.
And this year, it’s refundable. It’s new.
“Suppose you’re an Uber driver and you work part-time and only earn $ 4,000. You won’t get your child tax credit under normal circumstances,” said registrant agent Bill Nemeth . “In other words, with an income of $ 4,000, you won’t get a refund of $ 2,500 for every child you’ve had.”
But there is a temporary new formula, he said.
“If you win $ 20,000, you get the full refund per child. But this year, this year alone, special special, everything is refundable,” Nemeth said.
Most families are therefore captured by this new credit.
So be on the lookout for this money. The calculations can be confusing, so check it out, use this calculator to estimate your status: 2021 Child Tax Credit Calculator.
Just like stimulus checks, you don’t do anything unless you haven’t filed your taxes. Let’s say you had a great 2019 financially, but with the COVID-19 pandemic, your 2020 finances have been messed up. If you haven’t filed your most recent return, the IRS will use the 2019 numbers to determine your credit.
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