Last month the latest Covid relief package was signed into law. For those that qualified, most have already received the stimulus check by now ($1,400 per person). The bill also increased the child tax credit to $3,600 for children under the age of six and $3,000 for children age 6-17 (prior to this the child tax credit was $2,000 for children under age 17).
Many are unaware that you do not need to wait until you file your 2021 tax return to get part of this year’s tax credit. Starting in July, the IRS is to begin mailing monthly checks of $300 for each child under the age of six and $250 for each child under the age of 18 (they have recently stated that they may not be ready to send out the checks beginning in July). These payments are to be mailed “periodically” (it is assumed monthly) until December 2021, resulting in half of the tax credit for 2021 being received during the last half of the year. You will receive the remaining half of the credits when you file your 2021 tax return.
Eligibility is determined from your last filed tax return (2019 or 2020). The credit begins to be phased out for individuals with a modified adjusted income over $75,000 ($150,000 for a couple).
The IRS is also supposed to create a portal to be used to update your information (ie: for those having a new baby) or to opt out of the monthly payments for those that want to wait to claim the credit when they file their return.