1st Child Tax Credit payment to be sent July 15
MILWAUKEE - If you’re a parent, you likely have some money coming your way on July 15. It’s not a scam. It’s the government trying to get cash directly to families who may need it.
Iesha Gatlin knows the importance of accessible child care. She’s the mom of a 4-year-old and runs her own day care, but until Contact 6 spoke with her, even Gatlin was unaware that most families will soon get more money from the IRS that could help them pay for child care.
"I had no idea," said Gatlin. "I think it's gonna be helpful for the families in the community."
Under the American Rescue Act, the Child Tax Credit was expanded. It’s usually $2,000 per child, but in 2021, most families with kids will get up to $3,600 for each child under age 6, and $3,000 for each child between ages 6 and 17.
While tax relief is usually unavailable until you file taxes, this year, half the money will be sent in advance.
"Individuals and families will receive this money in monthly installments on the 15th of every month," said Christopher Miller, IRS spokesman. "Starting July 15 through December of 2021."
Depending on age, those monthly payments could look like $250 or $300 per child. Parents will get the other half of the credit when they file their 2021 taxes. They don’t have to do anything to get the money, so long as they filed taxes in 2019 or 2020.
"You're automatically going to be enrolled in this," said Nicholas Hammernik of Hammernik Tax and Accounting. "You're going to get these payments unless you choose to take action."
Hammernik says some families may wish to unenroll from the payments, so it offsets their liability come tax time.
"You're still going to get your full credit in some capacity, but it's just going to come in your tax return," said Hammernik.
The expanded advance tax credit does start to phase out for individuals earning more than $75,000 per year, or $150,000 for married couples filing jointly.
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Starting next week, 39 million households will be getting money from the IRS. Gatlin knows many families who will welcome it.
"I think that the pandemic affected a lot of parents. They couldn't go work," said Gatlin.
The deadline to decline the first advance payment has passed, but you can opt out from the rest of the payments.
You can use this free calculator from Omni to see how much you can expect to receive.