Connect with us

Hi, what are you looking for?

Money Management

Who Qualifies for the Child Tax Credit?


Many families will start getting payments from July onwards.

Introduced as part of the American Rescue Plan signed into law by President Joe Biden, American families are set to receive an extended Child Tax Credit (CTC) beginning on July 15. What this means is that approximately 36 million American families will commence receiving monthly payments from the IRS, which could go up to $1,800 per payment. In essence, the expanded CTC raises the annual benefits a family receives for their children from $2,000 to $3,600. But not all families qualify for this new scheme.

The current version of the CTC offers a $3,600 credit for each child in a family below the age of 6, and a $3,000 credit for children aged between 6 and 17, phasing out completely once the child turns 17. This results in monthly payments of $300 per child under 6 and $250 per child between 6 and 17. Similar to the stimulus checks distributed in 2020, the extended credit is limited to parents falling within specific annual income brackets. The breakdown is as follows:

  • $75,000 or less for single parents
  • $112,500 or less for heads of household
  • $150,000 or less for married couples filing jointly

If your family’s income exceeds those thresholds, you can still receive tax credits, however, they will decrease gradually until you become ineligible entirely with single incomes surpassing $95,000 and joint incomes above $170,000. Your eligibility will be based on your most recent tax return. It is important to ensure your 2020 taxes are accurately filed, as any discrepancies may cause issues. If your information is outdated and you receive tax credit funds you are not entitled to, you will be obligated to return the excess when filing taxes the following year.

If you are uncertain about your eligibility, you can use the IRS’ new CTC portal to verify your status. Should your information be outdated and you are no longer eligible, be sure to opt out of payments to avoid the need to repay next year.

You May Also Like

News

Peloton, known for their stationary exercise bikes and treadmills, has faced significant financial challenges over the past year. The company experienced a surge in...

News

Amid the ongoing global supply chain challenges, many retailers in the United States are grappling with surplus seasonal stock, leading to increased storage costs...

News

With the continuous increase in gas prices, a decrease in consumer confidence, and the ongoing conflict in Ukraine, the European economy faces significant challenges....

News

As the demand for electric vehicles grows and the push for environmental sustainability increases, automakers are gearing up to focus more on the development...

News

Today, Brian Armstrong, the CEO of Coinbase, conveyed to his team through a company-wide email that due to declining stock and crypto values and...

News

Recently, Peiter “Mudge” Zatko, a former cybersecurity specialist at Twitter, published a whistleblowing document on the platform. Zatko highlighted several security issues with Twitter,...

News

Zelle is a popular peer-to-peer payment service that allows individuals to send and receive money, similar to apps like Venmo. It is widely used,...

News

Recently, after Chinese President Xi Jinping secured a third term, there was a sharp decline in the stock market in Hong Kong. Investors became...