When will you get the Child Tax Credit for $3,600? When your payments will arrive and how often - CNET

Child Tax Credit payments could start arriving in July.

Sarah Tew/CNET

It's obvious the big talk of the new stimulus bill is the third stimulus checks for up to $1,400 per eligible person (track your payment here). However, it's not the only provision providing families with extra money this year. Not only do families get a larger check this time (calculate your payment total) -- thanks to changes for dependents -- but they may in addition get the expanded 2021 Child Tax Credit, also known as CTC, which will bring even more mony later this year. (In fact, here are seven tax credits for 2021.) 

With the new CTC expansion, parents can claim up to $3,600 for each child dependent -- see more below for the exact amounts and qualifications. Before the new bill was passed, parents could claim up to $2,000 for each dependent aged 17 or younger on their tax returns. 

There are, however, still two important questions about the payments that haven't been given a final answer yet: When could you start receiving your Child Tax Credit checks, and how often would you get them? We'll explain that and more below. Here's more information about unemployment benefits in the new bill and what we know so far about whether a fourth stimulus check could happen. This story was recently updated.

When will your Child Tax Credit payments be paid out?

While the American Rescue Plan specifies that the CTC payments will begin arriving in July, a date hasn't been released yet. The IRS will make additional information about the expanded Child Tax Credit available "as soon as possible," the agency said in a statement March 12. 

In the same statement, the IRS urged taxpayers not to file an amended return related to the new legislation and not to take any other "unnecessary steps." 

2021 Child Tax Credit Amount

Age	Amount you could get per child
Age 5 and under	Up to $3,600, or $300 a month if monthly payouts occur
Ages 6-17	Up to $3,000, or $250 a month if monthly payouts occur

IRS Commissioner Charles Rettig said that payments will be automatic for those who file their 2020 tax returns by May 17, the new tax deadline.

However, nonfilers will need to file a tax return to get the credit, even if they don't usually submit tax returns. 

How often will the CTC payment be paid? 

The idea is for the Child Tax Credit to be paid out "periodically," according to the text of the stimulus bill, from July through December. However, the IRS is still working to determine how often it will be able to get the checks out -- and if that could even hit a monthly distribution. 

When asked if the agency would be able to start making payments in July, Rettig said that "that time frame might change in some manner" but that the agency is committed to hitting the goal. "I think it might be a challenge to get into the monthly, right out of the box," he said.

The amount you'd receive would be half of what you're owed for the year, under the new stimulus bill, and you'll receive the other half of the payment with your 2021 tax refund.

If paid out monthly, the payments would break down to up to $300 per month for each qualifying child age 5 and under, and up to $250 per month for each child between the ages of 6 and 17. Note that this amount phases out for those with higher incomes -- for single people earning more than $75,000 per year, heads of household earning more than $112,500 per year and married couples earning more than $150,000 a year.

2021 Child Tax Credit Amount

Age	Amount you could get per child
Age 5 and under	Up to $3,600, or $300 a month if monthly payouts occur
Ages 6-17	Up to $3,000, or $250 a month if monthly payouts occur

What method of payment will the IRS use to send the Child Tax Credit money?

When the payments do start arriving, the Treasury and IRS could very well send out the payments the same way they do the stimulus checks, Joanna Powell, managing director and CFP at CBIZ, told CNET. 

It hasn't been confirmed by the IRS yet, but if the agency does use the same method as stimulus checks, here's how it would work: If you have direct deposit on file with the IRS, that's how you'll get your payment. If not, you'll receive your money as a paper check.

Now playing: Watch this: Stimulus check 3: How much money you'll get

2:32

Will the IRS open an online portal where I can fix any errors? When?

The IRS is working on creating an online portal for the advanced credit, Powell said. The goal is to have the portal launched by July 1, Rettig said during the subcommittee meeting, but the IRS won't have the resources until after tax filing season ends.

Once the CTC portal is available, recipients can log in to update their information if their circumstances have changed. For example, if you have a child in 2021, the IRS wouldn't have that information on file yet, so updating those details could help you get a higher payment.

What's the plan once the payments end?

The final payment of the Child Tax Credit is scheduled to end by Dec. 31, 2021. President Joe Biden, however, wants to make the higher payments permanent, White House Press Secretary Jen Psaki said on Tuesday: "We're having those discussions with Congress."

It's unclear if the payments will become permanent.

Sarah Tew/CNET

What to do if you receive more CTC money than you actually should

The CTC isn't as flexible as the stimulus check rules. If you receive more money than you should have, you will have to pay it back. Powell explained that when you file your 2021 tax return (in 2022), if your tax situation isn't what the IRS has in its system, and you weren't entitled to as much as you received, you'll have to give the overpayment back. 

To avoid this tax inconvenience, make sure all of your information is updated before the payments start arriving. Powell estimates the portal will be open ahead of time so you can make any necessary adjustments.

Can I get all my CTC money as a lump sum instead of as separate checks?

Absolutely, but not this year. If you thought you could cash in on all the CTC money in July, that's not the case. Instead, you can opt out of getting the periodic advance payments and receive a lump sum in spring 2022 as a credit when you file your taxes. You'll be able to use the online portal to opt out. Again, you wouldn't receive any money until 2022.

For more information, here are five things you should know about the $3,600 Child Tax Credit for 2021. Plus, here's how to track your tax refund and your $1,400 stimulus check. 

Now playing: Watch this: Your tax questions answered in 3 minutes

3:26

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

from CNET https://ift.tt/39dNibc
via IFTTT