By Hampton & Pigott
Posted on 5-26-2021
2020 has been particularly hard year on families. President Biden’s Plan is one of the most progressive plans in American history. Families could get up to $3600 per child during this 2021 tax year. The Child tax credit is part of the $1.9 trillion covid relief billed passed in March. However, the money is different from the stimulus check payments. The disbursements are likely to roll out in July as a series of payments and the amount of money all depends on the age of the child and how much income the parent reported making on his/her taxes.
The child tax credit is not a new concept, normally parents filing their taxes could claim a credit of $2000 for every child 16 and under. Sometimes part of that can come as a tax refund when the parent files but under the new rules for 2021 the amount of credit has increased for many households and those families don't have to wait until they file 2021's taxes.
The credit is income dependent: so, a single tax filer needs to have an adjusted gross income of $75,000 or less to get the full child tax credit amount. But heads of households need to have an adjusted gross income of 100 and $12,500 or less to qualify for the full amount; and married couples filing jointly need to have an income of $150,000 or less to qualify for the full amount.
The age of each child matters: parents of children ages 5 and younger can get $3600 per child, including babies born this year. Parents with children ages 6 to 17 may qualify to receive up to $3000 per child. Additionally, parents may also receive money for their son or daughter age 18 and those between the age of 19-24 who are currently attending college- Parents can get up to 500 dollars.
There are stringent stipulations to receiving the money, the child being claimed must reside with the parent at least part time and must also be a U.S. citizen. For married couples filing jointly at least one spouse needs to have the Social Security number or individual taxpayer identification number and the child must have a Social Security number.
Some details are still being worked out on the delivery of the money. We don't yet know how frequently these child tax credit payments will be distributed to families.