[ad_1]
Do you know how much money to expect when the child tax credit payments are sent? Those who are eligible will get the first round of payments in July as long as they have qualifying dependents — yes, newborn babies and older kids in college are included. Half of the total amount you’re owed will come in monthly increments this year, with the rest arriving in 2022. (President Joe Biden is pushing for the payments to be further extended to 2025.) But you can opt out of the monthly payments if you’d rather get just one payment.
CNET’s child tax credit calculator can help you estimate how much you’ll get. (Here’s how to spend the money when it comes.) If your adjusted gross income for 2021 is above the specified amount, know that you’ll get less money for your kids overall. Parents who share custody of kids also have set rules.
If you filed your taxes before the new stimulus bill was passed, you shouldn’t need to file an amended tax form (track your tax status with the IRS). The IRS is still sending stimulus checks and plus-up payments, but will soon be able to focus on the child tax credit payment details. While you’re here, see if your state owes you money and how some could save up to $50,000 on their taxes this year. Also, here’s how to get a $50 discount on your internet bill. Here’s what we know about a fourth check, how the next stimulus bill could benefit you and student loan forgiveness. This story is frequently updated.
See your estimated 2021 child tax credit payments with CNET’s calculator
The new child tax credit raises the 2020 limits from up to $2,000 per child to a maximum of $3,600 — but the math gets complicated fast. Qualified children aged 5 and under count for $3,600. Kids between 6 and 17 years old count for $3,000 maximum per child; 18-year-olds and full-time college students 24 and under can bring parents a one-time $500 payment.
Enter your details below, including your adjusted gross income, or AGI, to see your payment breakdown. This calculator does not store or use your data. The results are based on our current knowledge of the law and should be treated as broad estimates only (the IRS will determine the final amount). We suggest consulting a financial professional for a more personalized estimate.
Child tax credit calculator for 2021
Use details from your 2019 or 2020 tax return.
1. Choose your filing status below.
Note: If your AGI is less than or equal to $75,000 as a single filer, $112,500 as a head of household or $150,000 filing jointly, you’ll receive the full amount. For incomes higher than $150,000, your child tax credit payments will begin to phase out by $50 for every $1,000 of income over the threshold.
How can parents opt out of the smaller monthly payments?
If you’d rather receive your 2021 child tax credit money as one large payment, you’ll be able to opt out of monthly payments once the IRS opens the online portal to help you make that decision and input other information, like if your AGI or other changed circumstances. The IRS is expected to open its child tax credit website by July 1.
Opting out would mean that instead of receiving $300 per month for your 3-year-old, and the remainder of your money in 2022 for example, you can wait until you file your taxes next year to claim the full $3,600 amount.
What to know if your kids will age out of a payment bracket in by the end of 2021
If you have a 5-year-old turning 6 by the end of the year, the total payment amount you could get for that child is $3,000. If you have a 17-year-old who turns 18 before the end of the year, you would receive $500 total for that dependent instead of $3,000.
Here’s more information about qualifications your child must meet for you to receive advance payments. Also, if you have a dependent who is a full-time college student and turns 25 this year, you won’t receive any payment for them.
Parents with 2021 newborn babies: Major child tax credit info
Children born in 2021 make you eligible for the 2021 tax credit of $3,600 per child (that’s up to $7,200 for twins). That’s on top of payments for any other qualified child dependents you claim. Here’s our guide for parents of 2021 babies, including what parents of adopted infants should know.
IRS overpayment and income details you’ll need to know
Your family’s eligibility is determined in large part by your adjusted gross income. So what happens if you get a new job or start making more money in 2021? What happens if the payments have already gone out and you spent the money?
The IRS has a plan for this, a child tax credit portal the agency will make available by July 1 so you can update your information. If you need to make an adjustment, it will lower the payment amounts you’d receive if your new income reaches the phaseout level, according to Garrett Watson, a senior policy analyst at Tax Foundation.
If you wait until 2022 to update your information when you file your taxes and you continue to receive the full amount based on your lower income, you would either have to return the excess money on your 2021 tax return next spring, according to Watson, accept a smaller 2021 refund or owe more in taxes.
2020 tax returns determine how much child tax credit money you’ll receive
You need to file your 2020 taxes to get the credit if you’re a nonfiler. The IRS will automatically make the payments for those who have their taxes filed by the May 17 tax due date, the IRS Commissioner Charles Rettig said. So if you don’t have your tax return submitted by this time, the IRS won’t know to send you a payment. Also, if you plan to file a tax extension, you’ll likely be able to use the IRS portal, where you can update your information in case you’ve gained dependents since the last tax filing.
More eligibility requirements your dependents must meet
There are some specific rules regarding qualifications not just for parents and caregivers, but for the children, too. Here’s what to know about dependent qualifications for the child tax credit. And here’s how you could get up to $50,000 back through one-time credits and benefits.
[ad_2]
Source link