While the IRS warns that miles of families across the country still do not claim the Child Tax Credit even though it is for the federal incentive, the plan that advance payments are awarded again hangs in the balance.
Unless Congress acts to extend the tax credit, the Treasury and the IRS will deliver monthly payments through December 15. Meanwhile, families who generally do not file taxes - either because their income is too low, because the parents have retired but have qualified dependents, or for any other reason - can claim the money through November 15 through a process. easy and in Spanish.
However, those who miss the November 15 deadline will still be able to claim the incentive during the next tax season. The American Rescue Plan enacted by President Joe Biden awards $ 300 for children under the age of 6 and $ 250 for children between the ages of 6 and 17 each month through the end of the year. The advance program increased the annual incentive from $ 2,000 to a total of $ 3,600.
Millions of American families with children have received four monthly payments through the new improved child tax credit. But time is running out for families who still need to register for the benefit.
That's because after December, families will have to file a tax return and wait to receive the full credit as a refund from the IRS. On the other hand, families who claim the credit will now receive cash up front and will receive the second half when they file their 2021 taxes next year.
There is also a limited period for families with children to register if they do not receive direct deposit payments.
Families who sign up for the credit will see larger remaining payments than those who have been receiving them on a monthly basis since July, when the checks began.
That's because the monthly money is an advance on a 2021 tax credit, with half due this year and the rest due when families file their taxes next year.
For a family with two children ages 5 and 7 who meet the criteria, the amount they would receive is $ 6,600 ($ 3,000 for the 7-year-old plus $ 3,600 for the 5-year-old).
If the parents filed a tax return in 2019 or 2020 and had direct deposit, the family should have received the first $ 3,300 of the credit in six monthly payments of $ 550 from July to December.
But if the same family does not file taxes because their income is too low, then they should register to receive the monthly payments. And if you didn't claim the July payment but signed up in August, as about 1 million families did, you'd still get $ 3,300 before December.
It means that families that did not receive a July or August payment but did get their first monthly payment in September will continue to receive their full advance payment for the year of up to $ 1,800 for each child under age 6 and up to $ 1,500 for each child age 6 to 17, details the IRS in a statement of September 15.
The total payment will be spread over four months, instead of six, making each monthly payment larger. For these families, each payment is up to $ 450 per month for each child under the age of 6 and up to $ 375 per month for each child ages 6 to 17, according to the agency.
Those who wait to sign up in November will receive the full first half of the credit in a single check in December, according to the IRS.
Sure, if a family doesn't sign up for the new child tax credit this year, they will lose their advance payments, but they can still get the money in a lump sum next year by filing a tax return.
Still, that means they will receive the money months after the expected delivery date and may have to deal with severe delays from the IRS.
The tax agency urges families to enroll as soon as they can, unless they prefer to opt out and receive the lump sum benefit next year.
It is also important for families to claim the money now, as the credit may not extend next year. The more progressive Democrats try to see the incentive established as a permanent program, but the plan faces opposition.
DEADLINE EXPIRES IN JUST DAYS
Those who successfully register between now and November 15 will receive their payments spread between November and December, or in December as a lump sum.
IMPORTANT.
After November 15, non-filing families who have not yet registered can claim the full Child Tax Credit during next year's tax season.