$3600/3000 Child Tax Credit Calculator: how much will I receive per child?
With payments beginning next month, many families are curious how much they will receive as a part of the enhanced child tax credit this year.
On 7 June, the Internal Revenue Service (IRS) announced that it has begun sending letters to families who will be eligible to receive benefits from the Child Tax Credit beginning next month. The first batch of personalized letters were sent to thirty-six million families. The tax authority will continue sending these letters which outline the amount each family will receive as they gather the information necessary to distribute the payments. The information needed to is captured through “either their 2019 or 2020 federal income tax return or who used the Non-Filers tool on IRS.gov last year to register for an Economic Impact Payment.” Payments are slated to begin on 15 July.
The IRS also announced that they would be launching a page on their website where parents and guardians will be able to “determine whether they qualify” for the payments. Additionally, a second tool, the Child Tax Credit Update Portal, will be launched to help those who quality manage their payments. Through this tool, families will be able to opt out or unenroll from the program. Additionally, once payments begin, the portal will also help track payments and make changes to their information. This portal will be available in Spanish and more details on its launch and functionality are expected soon.
Calculating your payment
The IRS has confirmed that it will send payments worth “up to $300 per month for each qualifying child under age six and up to $250 per month for each qualifying child ages 6 to 17.” Families and single parents can expect payments on the 15th of each month through December, with the remaining balance of the credit will be distributed after taxes are completed next year.
Calculating your expected payment is easy. For example, say a qualifying family has three children, ages four, nine, and eleven. Each month the family would receive $300 for the four-year-old and $500 for the nine and eleven-year-old ($250 each). These monthly payments would total $800. The full value of the credit for this family would be $9,600. This is $3,600 more than the family would receive under the credit’s previous structure, which only allowed families to claim $2,000 per child if they met specific income requirements. If our fictional family had an income less than $2,500 a year, they would have been ineligible to claim the credit at all. Removing income minimums will allow the credit to be sent to 24 million more children.
Making the credit permanent
President Biden and some within the Democrats caucus on Capitol Hill are working to garner support for the American Families Plan, which would make the enhanced credit permanent through 2025. The restructured Child Tax Credit is expected to cut child poverty in half this year, but experts warn that those numbers could quickly regress if the extension is not passed. However, with Republicans opposed to the plan, its passage seems increasingly unlikely in the coming months.