CALIFORNIA, USA — Millions of families by now have received the first payment of the expanded child tax credit. The Internal Revenue Service started sending out Letter 6419 to families in late December 2021 and for those who have not received it yet, it may still be in transit. However, all the information can be found on the IRS website.
It was approved as part of the Democrats’ $1.9 trillion stimulus package that President Joe Biden signed into law back in March. The first installment is said to total $15 billion.
If you still have questions and don’t know if you qualify or you are worried about why you received this credit. Economist John Paul Valdez helped share some important information that everyone should know.
WHAT IS THE CHILD TAX CREDIT?
It’s a credit not a deduction. It’s like cash. The child tax credit still exists, it was on the books prior to the last round of aid and it was $2,000 dollars a year per child to help children out of poverty. That still exists. However, we had a year of the enhancement child tax credit and that was for much more money, instead of $2,000 it is $3,000 for children of certain ages and $3,600 for children of other certain ages.
WHO QUALIFIES FOR THE CHILD TAX CREDIT?
Anyone single and head of the household, earning less than $112,500 dollars a year and that has children is going to qualify for the child tax credit. The lower amount from prior years, whether it's the enhanced amount you qualify for the child tax credit, as long as you’re not making too much money.
If you have a spouse and your combined income is under $150,000.
HOW MUCH PER CHILD?
The new Child Tax Credit is worth $3,000 per year, per child ages 6 to 17 and $3,600 per year per child under 6-years-old. It will be paid out in monthly payments, not once a year. If you have children under 18, you are likely eligible even if you do not usually file taxes or have little to no earnings.
WHAT DO I NEED TO DO TO GET THE EXPANDED CHILD TAX CREDIT?
File your taxes, even if you don’t file them normally. This will tell the IRS where to send your payment and how many children you take care of. If you don’t file, you might miss out on other tax credits.
WILL IT AFFECT MY TAXES?
It depends on whether or not you have been receiving the monthly checks, or what part of it you were getting paid for the enhanced program. But many people didn’t file in time or many people didn’t know how to file or they didn’t get it in time and they don’t normally know how to file taxes.
It may affect your taxes if you received an over payment and the IRS didn’t adjust the amount on later payments.
It may affect your taxes if you received payments and you didn’t qualify for it.
It may affect your taxes if your income changed and you didn’t report it to the IRS, all of these means you will have to pay this back.
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