As a part of the American Rescue Plan Act, eligible families will start receiving monthly payments from the federal government on July 15 through December of 2021. According to the Federal Trade Commission (FTC), the Internal Revenue Service (IRS) will send these monthly payments directly to people through direct deposit, paper checks or debit cards.
What are these payments for?
Unlike the economic impact payments, these payments are an advance on families’ Child Tax Credit. People who are eligible will get up to half their Child Tax Credit in these monthly payments and the other half when they file their 2021 taxes.
Who qualifies for these payments?
People will qualify if they have a qualifying child which is explained in detail on the IRS website. You must also have a main home in one of the 50 states or District of Columbia for more than half of the year.
How much will each family receive?
According to the IRS, the Child Tax Credit for 2021 is $3600 for children ages 5 and under at the end of 2021 and $3000 for children ages 6-17 at the end of 2021. The amount you will receive will depend on your modified adjusted gross income. You can find out more on the IRS website.
Generally, the IRS states that for each of your qualifying children age 5 or younger, you will receive $300 per month and for each qualifying child 6-17, you will receive $250 per month. Again, this is dependent on your modified adjusted gross income, so your payment may be less than these figures.
Should you be on the lookout for scams?
Yes! Anytime there is money from the government in the news, scammers want to get in on the action. They may call, text, email or direct message you and say they can help you get your payments earlier or get you more money. Both of which won’t happen. Keep in mind that only the IRS will be sending these payments, and anyone trying to “help” you get your child tax credit is trying to get your money. The government will never call, text, email or direct message you out of the blue and ask for money or information. Be sure to always keep your money, Social Security, credit union accounts, debit and credit card numbers to yourself!
The IRS will be updating their website to include tools to help you check your eligibility and unenroll from payments. Find out more here: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021