Yahoo Finance IRS To Begin Sending Out Child Tax Credit Payments In July
The Internal Revenue Service will begin sending monthly payments to families with children in July as part of the new expansion of child tax credits, the head of the agency said on Tuesday.
“We fully expect to launch in July,” IRS Commissioner Charles Rettig told lawmakers on the Senate Finance Committee. “We expect to launch with payments going out on a monthly basis.”
The expanded benefits are part of President Joe Biden’s $1.9 trillion coronavirus stimulus package, the American Rescue Plan, which he signed into law last month.
The law will provide families a tax credit of up to $3,600 for every child under 6 and $3,000 for each child under 18. The full benefits are available to single parents with incomes up to $75,000 per year, or joint filers with incomes up to $150,000 per year (they begin to phase out from that point, and filers with individual incomes over $95,000 or couples with incomes over $170,000 no longer qualify).
Taxpayers with income above the thresholds are still eligible for the normal child tax credit of $2,000 per child under 17.
Payments will be made in monthly increments to parents beginning in July and continue through December as part of the expanded program: $300 a month for children under 6, and $250 a month for children under 18. Those figures will only cover half of the full benefits. The other half will come to parents as part of their 2021 tax returns.
The credits will essentially provide a guaranteed income for parents across demographics, The New York Times noted. More than 93% of kids, or 69 million, qualify under the expanded measures.
Rettig warned that an online portal set up by the IRS in July to help parents inform the agency of any changes in their income would be as “user-friendly as possible.” But he added there may be some difficulties, as have been seen in other major government payment programs, including the initial stimulus measures sent out by the IRS during the start of the COVID-19 pandemic.
“If we end up not being on track for some unforeseen situation we will advise you and the committee,” Rettig told lawmakers.
The IRS extended this year’s tax season by a month after lawmakers said shifts in the tax code and a bevy of unemployment benefits sent out during the pandemic would complicate filing. The new deadline is May 17.
Related...
U.S. Employers Add 916,000 Jobs In March As Hiring Accelerates
The Economy Is Adding Jobs, But Long-Term Unemployment Remains A Threat
Rep. Mondaire Jones: 'No Reason To Work With' GOP Right Now
This article originally appeared on HuffPost and has been updated.
