If you have kids under 18, odds are that you’ve been getting an extra $250 to $300 per child each month, courtesy of the advance child tax credits that began in July. But that much-welcomed extra cash is about to end.
The payments scheduled for Wednesday, Dec. 15, will be the final round for the monthly child credits.
Why Are the Child Tax Credits Ending?
In March 2021, President Joe Biden signed the $1.9 trillion American Rescue Plan into law. Along with $1,400 stimulus checks for most Americans, the bill provided a temporary child tax credit boost. “Temporary” is the key word here.
The bill raised the value of the child tax credit from the typical $2,000 maximum per child. For 2021 only, the credit increased to $3,000 for children ages I6 to 17, or $3,600 for each child under age 6. Half of the credits were available as monthly installments.
Since July, parents who qualify have received up to $250 a month for each child between 6 and 17, and up to $300 a month for each child younger than 6. The remaining half of the credit — $1,500 to $1,800, depending on the child’s age — will be disbursed next year when parents file their taxes for 2021.
Could Congress Extend the Expanded Credits?
It’s possible, but don’t count on it. The Build Back Better Act that Biden wants to pass before Christmas includes a one-year extension of the expanded credit and additional measures to address soaring child care costs. But as of Dec. 13, the bill remains at an impasse in the U.S. Senate.
Unless Congress takes action before year’s end, the payments will end on Dec. 15. If the extension expires, child tax credits will revert to the normal amount. A married couple with a combined income of $400,000 or less can receive up to $2,000 per child. However, the payments won’t be available in advance monthly installments. That means you’d have to wait until tax time to receive the credit.
How Do I Get the Other Half of the Credit?
The only way to get the remaining half of the credit is to file your 2021 tax return. Typically, you can file your taxes starting in mid- to late January. The deadline to file taxes for 2021 is April 15, 2022, unless you file for a six-month extension. If you or your partner gave birth to or adopted a child in 2021, you can receive the full credit of up to $3,600 when you file.
Even if you’re not typically required to file taxes, it’s essential that you file a return early next year. Doing so could have additional benefits. For example, you could qualify for a $1,400 stimulus payment for yourself and your dependents if you didn’t receive it in the spring. Many low- and middle-income families are also eligible for the Earned Income Credit. A family with three or more qualifying children could receive up to $6,728 for 2021.
The quickest way to receive your additional child tax credit money is to file a return online. There are plenty of free tax filing software programs that simplify the process. But it’s vital that you file online instead of by mail. Submitting a paper return could add weeks, if not months, to your wait time.
This post on TessMore Finance is also published on The Penny Hoarder.
The Penny Hoarder https://ift.tt/3IZmrQK
Comments
Post a Comment
We will appreciate it, if you leave a comment.