Child Tax Credit 2021: Qualifications and How Much It Will Be
The pandemic has taken a great toll on American families. That is why the federal government is making a way to help them out amid COVID-19 through several plans, just like the child tax credit 2021. The child tax credit 2021 is part of President Joe Biden's American Rescue Plan. According to CNBC, it will help lift more than five million children out of poverty this year.
The Child Tax Credit 2021 is one of the several child-focused tax credits of the United States that serves as effective ways in reducing one's tax bill.
How Much Is Child Tax Credit 2021?
Newdwallet noted that the Child Tax Credit 2021 is a refundable tax credit that will grant up to $3,600 per qualifying child under the age of 18. That is because a dependent child under the age of six until December 31 will receive at least $300 per month. Meanwhile, children between the ages between six and 17 until December 31 will receive $250 per month.
In short, American families with children aged six years old will have at least $3,600 for the tax year 2021. $3,000, on the other hand, will be available for families with dependent children aged between six and 17 for the tax year 2021. Extra $800 each month from July to December will be added to families with a three-year-old, a six-year-old, and a 17-year-old.
How to Get Paid for Child Tax Credit 2021?
Nerdwallet noted that an individual can claim the Child Tax Credit 2021 in three different options.
First, an individual can claim 100 percent of the Child Tax Credit when filing their 2021 taxes. Second, Americans eligible for the Child Tax Credit can either get their 50 percent of the child tax credit and claim the other 50 percent on their taxes later. The third option will be under the "Cash Payment Program," where those eligible for the tax credit will receive six monthly payments from the U.S. Treasury through direct deposit on a bank account.
CNBC noted that the payments from the said tax credit can also be in the form of a prepaid debit card or paper check, depending on what information the IRS has on file for each eligible taxpayer.
How to Qualify for the Child Tax Credit 2021?
To get paid, an individual must be qualified for receiving the payment from the federal government. Individual taxpayers with a gross income of $75,000, heads of household with a gross income of $112,500, and married taxpayers filing jointly or widows earning $150,000 are eligible for the Child Tax Credit 2021.
Just make sure that a dependent child must be 12 years old or younger at the time child care is provided, as well as providing the taxpayer identification number and the care provider's name. However, the payment can't be claimed by the spouse of the care provider, a parent of the dependent child, a dependent listed on the tax return, and a child 18 years old and younger.
The first payment for Child Tax Credit 2021 will be made on July 15. Subsequent payments to eligible taxpayers will be received every 15th of the month.
WATCH: Biden Announces Monthly Payments As Part Of Child Tax Credit - from NBC News
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