The article has been automatically translated into English by Google Translate from Russian and has not been edited.
Переклад цього матеріалу українською мовою з російської було автоматично здійснено сервісом Google Translate, без подальшого редагування тексту.
Bu məqalə Google Translate servisi vasitəsi ilə avtomatik olaraq rus dilindən azərbaycan dilinə tərcümə olunmuşdur. Bundan sonra mətn redaktə edilməmişdir.

Child tax credit: what you need to know about the amount, timing and overpayment

If you are eligible for the Revised Child Tax Credits, you will receive half of the money in 2021 and the rest in 2022. What else do you need to know about these checks, says CNET.

Photo: Shutterstock

Thanks to the Extended Child Tax Credit (CTC), your family can periodically receive money during the second half of 2021 - the first half of 2022. Up to $ 3000 will be listed for older children and $ 3600 for younger children. The IRS is still filling out the details for child tax credit payments, but the outline is already available.

When will the first CTC payment be sent?

According to current data, payments will begin to arrive in July, but there is no specific date yet. The IRS will provide additional information on the Extended Child Tax Credit "as soon as possible," the agency said in a March 12 statement.

The Child Tax Credit will be paid “periodically”, according to the text of the law, from July to December. So far, the IRS has not told how often checks will be sent. At first, it was about the monthly delivery of checks, but then the word "periodically" began to sound.

Important fact: CTC will be paid between 2021 and 2022

You will not receive all of your Child Tax Credit payments right away this year. As with your taxes, the Child Tax Credit in the Income Incentive Bill is set for 2021. The “credit” part means that the amount of your tax debt will be reduced by the “credit” that you will receive for your dependents. This can either decrease your 2021 tax payment to the IRS (filed in 2022) or increase your 2021 tax refund. You usually get this "credit" as a 2022 tax refund. But the plan is to get you money early, so checks will start arriving in 2021 as “advance payments”.

This logic also explains why your 2021 child tax credit is split in two. The first part, in 2021, is an advance that you can start using right away. The second part will apply to taxes for 2021 that are filed in 2022.

What Parents Should Know When Sharing Child Custody

During the first two payments of federal financial assistance, some parents who jointly take care of the child, but who were not married to each other, had the right to apply for a loan for the same child, but only if they alternated years in which they indicated the child as a dependent (for example, mom indicates in even years, dad in odd years). For the third payment, this is not allowed.

On the subject: Tax season 2021: 9 deductions everyone can get

How Child Tax Credit Payments May Change This Year

As a reminder, the amount you receive will be half of the amount owed to you for the year under the new stimulus bill, and you will receive the other half along with your 2021 tax refund filed in 2022.

At a monthly frequency, benefits will be up to $ 300 per month for each child age 5 and under and up to $ 250 per month for each child age 6-17. Note that this amount is being phased out for people with higher incomes — single people earning more than $ 75 a year, heads of households earning more than $ 000 a year, and married couples earning more than $ 112 a year. According to Joanna Powell, Managing Director and Certified Financial Planner at CBIZ, your child tax credit payments will begin to gradually decrease by $ 500 for every $ 150 of income above these thresholds.

So if you are eligible for $ 3000 and have one dependent, you will receive approximately $ 250 per month from July to December, for a total of $ 1500. You will then need to claim the remainder of the Child Tax Credit when filing your 2021 tax return the following year (2022).

How the IRS can send CTC: direct deposit, mail, other payment method

It may depend on how you receive your stimulus checks, Powell said. The IRS has changed this in the past, but there is no official guidance yet.

For example, if you received all three incentive checks by direct deposit into your bank account, it is possible that your child tax credit could do the same. If you are getting social security benefits such as SSI or SSDI, you may be able to get a Direct Express payment. Veterans who usually don't pay taxes may also have a different shipping method.

How Filing Your 2020 Tax Return May Affect Your CTC Amount

Taxpayers are not required to file a revised tax return related to the new legislation and must not take any other “unnecessary steps,” the IRS said on March 12. Payments will be made automatically for those who file their 2020 tax returns by May 17th.

However, non-filing individuals will have to file a 2020 tax return in order to get credit, even if they don't normally file tax returns. This will allow the IRS to know how many dependents in the household are counting towards child tax credits.

On the subject: Not Everyone Will Get Coronavirus Aid This Year: Why Some Will Have To Wait For Next Tax Season

IRS Portal Opens By July: What This Means For CTC Addressees

The IRS will launch an online portal by July 1st. Once the Child Tax Credit portal becomes available, recipients will be able to log in to update their information if their circumstances have changed. For example, if you are having a child in 2021, the IRS will not have this information on file yet, so updating this data could help you get a larger tax credit payout.

Will you owe the IRS money if you get more than you owe

Yes. The Child Tax Credit is not as flexible as incentive payments. If you receive more money than you owe, you will have to return it. One example is when you and your child's other parent (who is not your spouse) are paid tax credits for the same dependent.

When you file your tax return for 2021 (in 2022), if your tax situation is different from what the IRS has in its system and you were not eligible for that amount, you will have to refund the overpayment. To avoid tax inconveniences, make sure all your information is up to date before payments begin to arrive. Powell estimates that the portal will be open ahead of time so you can make the necessary changes.

Is it possible to receive the entire CTC payment at once instead of several small payments?

Yes, but not this year. Instead, you can opt out of recurring upfront payments and get a lump sum payment in the spring of 2022 as a loan when you file your tax return. This means that you will receive a larger tax refund or owe the IRS less money because the loan will be deducted from your total amount.

You can refuse to participate, you can do this on the online portal. Again, you won't receive any money until 2022.

You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New York

What to Expect When CTC Advance Payments End in December

The final advance payment of the Child Tax Credit is scheduled to be completed by December 31, 2021, with the remainder due in 2022 when the tax season begins. But President Joe Biden wants to make the higher payments permanent, White House spokeswoman Jen Psaki said on March 16. Discussions are underway with Congress.

Read also on ForumDaily:

Four documents without which you cannot file a tax return

Biden for the first time put the US economy in the hands of women: how they deal with it

Green card for a relative: how much money a sponsor should have

How to find out the waiting time for immigration services and check the status of the case

Educational program taxes in the USA tax season Special Projects
Subscribe to ForumDaily on Google News

Do you want more important and interesting news about life in the USA and immigration to America? Subscribe to our page in Facebook. Choose the "Display Priority" option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram - there are many interesting things. And join thousands of readers ForumDaily Woman и ForumDaily New York - there you will find a lot of interesting and positive information. 

1080 requests in 2,123 seconds.