Parents, you will likely receive a monthly cash infusion for each minor child in the second half of 2021. Monthly payments for the temporary additional tax credits for additional children Start hitting bank accounts July 15th.
The credits, which are part of the American relief plan, offer an additional $ 1,000 for children ages 6-17 and $ 1,600 for children under 6 on top of the regular child tax credit of $ 2,000. The total value of the tax credit is $ 3,000 for children ages 6-17 and $ 3,600 for children under 6.
Half of this money is paid out in advance in monthly installments. Earn $ 250 per month for each dependent child 6-17 years of age and $ 300 per month for each child under 6 years of age. You will then get the other half of the balance when you submit a tax return for 2021 next year.
However, the rules can get confusing if your child is nearing a sixth or 18th birthday. Here are the deadlines based on your child’s date of birth. You can find additional eligibility requirements, including income restrictions, in ours Child Tax Credit FAQ.
Earn $ 250 / month if your child was born after this date
To qualify for the $ 250 Monthly Children’s Loans, your child must be 17 years of age or younger on December 31, 2021. If your child was born on January 1, 2004 or later, you should receive the additional $ 250 per month if you meet the other requirements. Then receive a $ 1,500 tax credit when you file your 2021 tax return.
But what if you are the parent of a 2003 baby? Sorry, you will not receive a tax credit for your child even if they are still dependent.
Earn $ 300 / month if your child was born after this date
To qualify for $ 300 monthly child credit (totaling $ 3,600), your child must be 5 years or younger on December 31, 2021. If your child was born on January 1, 2016 or later, you should receive the additional $ 300 per child per month if you meet the other requirements. Then receive a $ 1,800 tax credit when you file your 2021 tax return.
If your child was born between 2004 and 2015, you will receive the additional $ 250 per month followed by the $ 1,500 credit when you file your taxes for 2021.
What about babies born in 2021?
If your child was born in 2021, you will still be eligible for the full tax credit of $ 3,600. However, because you did not include your child on your 2020 tax return, you will not receive your monthly payments automatically. The IRS says on its website that taxpayers “will have the opportunity to update information about changes in their income, enrollment status, or the number of qualified children”.
It is likely that you can provide the child’s information and receive monthly payments, although the IRS has not released any further details. Otherwise, you’ll have to wait and get the full $ 3,600 balance when you file your taxes.
If you have a new family member on the way, they’ll continue to qualify for the $ 3,600 credit – as long as they make their debut by December 31, 2021.
A bonus for all of these 2021 babies, not only are you eligible for the $ 3,600 Child Loans, but you get one too $ 1,400 stimulus check on their behalf when you submit your 2021 return.
Robin Hartill is a certified financial planner and senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advisory column. Send your tricky money questions to [email protected].
This article originally appeared on www.thepennyhoarder.com