Starting this week, many taxpayers who have children will start receiving advance Child Tax Credit payments from the Federal government. This will put hundreds of dollars into the pockets of American families each month for the rest of this year.
What is a Child Tax Credit?
Most taxpayers with children will qualify for a Child Tax Credit when they complete their income tax returns each year. For each child you claim, you earn money in the form of a credit, which lowers your taxes.
As part of the Federal government’s American Rescue Plan to relieve the financial stress caused by the COVID-19 pandemic, the Child Tax Credit has been increased from $2,000 to:
Why am I getting a payment now instead of just a tax credit?
To help families right away, the Federal government is sending half of that credit to you as advance Child Tax Credit payments. This puts your money in your hands starting now rather than making you wait until after filing income tax returns next year.
How much money will I receive?
Each month between July 15 and December 15, 2021, the Internal Revenue Service (IRS) will send an advance payment of the Child Tax Credit. You will receive:
This adds up to half of what you would qualify for when filing in 2022. You will still claim the other half of the credit when you file your 2021 income tax return in 2022.
If the IRS has your bank information, you will be paid through direct deposit. (Look for the label “CHILDCTC” on your statement.) Others will get a check or debit card in the mail.
What do I need to do to receive this payment?
Nothing, if you filed a tax return in 2019 or 2020 or used Non-filer tools to receive the Economic Impact Payment (“Federal Stimulus”).
Use this tool from the Consumer Financial Protection Bureau to make sure you do not need to take any additional steps.
If you do not wish to receive the advance payment, the IRS has an option to opt out.
What if I did not file 2019 or 2020 income taxes?
If you have a qualifying child born before 2021 but did not have a filing requirement because you made too little money or have no taxable income, you can still receive the tax credit. Use the IRS “Child Tax Credit Non-Filer Sign-Up Tool” found on the IRS website.
I am an ITIN holder. Can I receive a Child Tax Credit?
ITIN holders qualify to receive the Child Tax Credit money if they have a qualifying child, who:
Are there income limits?
The full credit is available to families with a 2020 or 2019 adjusted gross income of less than:
Families will receive a reduced amount if their income is up to:
Watch out for scams!
The IRS will never call to ask for personal information or threaten your benefits by phone call, email, text or social media.
You do not need to pay anyone to receive this benefit.
Get your credits faster with BankOn LA County
We encourage unbanked County residents to open an account as soon as possible to have their money electronically deposited into their account. Our BankOn L.A. County program offers low-cost checking accounts to County residents. Our partnering financial institutions accept alternate forms of identification so that the accounts are available to everyone.
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