How the American Rescue Plan Monthly Child Tax Credit Works
Child tax credit: how to know if you qualify, how much you will be paid
Biden increased child tax credit payments as part of his US bailout. Here is the latest information on how much you will receive and when you will receive payments.
Just the FAQ, USA TODAY
Advocates and elected officials say the monthly child tax credit checks of $ 250 or $ 300 per child coming to most parents in New Hampshire, Maine and across the country this month will go a long way to help families in financial difficulty and in difficulty.
The $ 1.9 trillion US bailout package approved by Congress and signed by President Joe Biden earlier this year increases the child tax credit for this tax year so families will get a credit of 3 $ 600 in 2021 for children under six and $ 3,000 per child aged 6 to 17. This replaces the old $ 2,000 credit that ended when a child was 17 years old.
The child tax credit plan will distribute half of the credit directly to families earning up to $ 150,000 per couple through monthly payments over six months, starting July 15, so they don’t have to. have to wait to file their tax return next year to receive the relief.
“This is a big deal for this country, something that is going to really shake things up in terms of affordability for many families,” said Congressman Chris Pappas, D-NH, who attended an event at the Children’s Museum of New Hampshire. in Dover on Monday. “These direct payments will help families at different income levels. We all know that the hardships our families face are not just due to COVID, but they have been made worse by it.”
The payments will represent nearly 200,000 children across New Hampshire, including 103,900 in the 1st Congressional District, Pappas estimated.
Here’s what the community should know about the program:
Who is entitled to advance payments
Parents with children under 18 earning up to $ 75,000 and couples filing jointly earning up to $ 150,000 will receive the full credit of $ 3,600 per child under 6 and $ 3,000 per child ages 6 to 17, according to Pappas and the IRS.
Families will receive a portion of the credit in 2021 in advance payments of up to $ 250 per month for each eligible child aged 6 to 17 at the end of 2021 or $ 300 per month for each eligible child under 6 years of age. the end of 2021.
Previous story: 90% of families with children in NH, Maine will receive monthly checks
Individuals and couples who earn more than these respective limits will have their credits reduced by $ 50 for every $ 1,000 of adjusted gross income earned above the limits.
In addition, the tax credit is fully tax exempt, allowing low-income families to keep the full amount, officials said.
When to expect to receive payments
Monthly child tax credit payments will be made to families starting July 15 and will continue for six months, by direct deposit for people who received previous tax refunds or stimulus payments by direct deposit. Some families may receive payments by mail.
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The IRS automatically enrolled families based on their 2019 or 2020 tax return, or information entered into the non-filing tool on IRS.gov in 2020 to register for economic impact payments.
No further action is required unless families did not file tax returns in 2019 or 2020 and did not sign up for Economic Impact Payments last year. They can still register through the IRS website, using the Non-Filer Registration Tool.
The impact of payments
“The expansion of this tax credit will make a significant difference in the lives of New Hampshire children,” said Senator Maggie Hassan, DN.H. “It’s an important way to raise these children and their families – and we know that when families thrive, it ripples across our economy. It’s a win-win for everyone.”
It was previously reported that the payments are expected to lift 8,000 New Hampshire children and 10,000 Maine children out of poverty, as well as relieve the families of approximately 222,000 New Hampshire children (87%) and 229,000 Maine children. (91%), according to the Center on Budget and Policy Priorities. Nationally, CBPP predicts that child tax credit provisions will raise 4.1 million children above the poverty line, lift 1.1 million children out of poverty. extreme poverty and reduce the remaining number of children living in poverty by more than 40%.
A “stamp” for families
Amanda Sears, director of Campaign For A Family Friendly Economy, said in her role she talks to families across the state about the challenges they face, and unexpected expenses like car repairs are a big deal.
“Before the pandemic, 40% of average Americans couldn’t afford an unforeseen expense of $ 400,” Sears said. “A week after the start of the pandemic, a week of people out of work, we started to see long queues in pantries. I think it showed that resilience that we perhaps thought was the families had weren’t there, and families really were living more paycheck after paycheck. “
Clifton West, Executive Director of Black Lives Matter Seacoast, is the new father of an almost 3 month old baby and the stepfather of two young children. West said many families like hers are working overtime on a paycheck. He said the monthly payment can allow families more financial freedom to make ends meet.
“I see this as a form of economic equality for parents of color and parents who live below or near the poverty line,” West said. “Last year was probably the most difficult financial year we have had in our house. I know that having a tampon will help my family immensely and allow my wife to return to work soon.”
State Senator Rebecca Perkins Kwoka, a Democrat from Portsmouth, said the provision of child care and the accessibility of child care is one of the biggest challenges for working families. Perkins Kwoka said the payments would “give families a bit of a break” financially.
Will payments continue in 2022?
Pappas said he hopes the pilot program method of distributing tax credits throughout the year will help families budget and deal with unforeseen expenses with the federal support that will come in each month. But it’s too early to tell, he said. The current legislation is only valid for 2021.
“Expanding this program is something that is on the table as we discuss the US plan for families,” Pappas said. “I think there will be a lot of talk in Washington over the next couple of months about big issues, but we can’t ignore the needs of our workforce and the needs of our families.… Take credit child tax permanent expansion is something worth discussing and hopefully we can support it. “