July marks the rollout of the Biden Administration’s new Advanced Child Tax Credit (ACTC), which forms a key part of the American Rescue Plan. The ACTC increases payments by up to USD 3,600 per child under 6 and a maximum payment of USD 3,000 for those up to 17 years of age. The tax credit is fully refundable.
Who qualifies for the Child Tax Credit?
To qualify for the full enhanced credit, a parent or household must earn less than USD 112,500 or USD 150,000, respectively. Those eligible can receive up to USD 300 per month for each of their children under 6 years of age and USD 250 per month for each child aged between 6 and 17 until the end of 2021.* Parents can then claim the remaining 50% when they file their 2021 tax returns next year. If parents prefer not to complete a full tax return, they can register to receive the enhanced child tax credit via the Internal Revenue Service (IRS) portal.
How does Child Tax Credit work?
If you submitted your tax returns in 2019 and 2020 to claim the regular child tax credits, the Internal Revenue Service probably has your details. If, however, you didn’t file tax returns or used the IRS non-filer tool within the last year for stimulus checks, then you need to take action! It’s important to file your returns and register on the IRS website to ensure you don’t miss out on these payments if you’re eligible.
Still not sure if you qualify for payments? Find out via the following online tools accessible on the IRS website:
- The Child Tax Credit Eligibility Portal
- A non-filer portal
- The Child Tax Credit Update Portal
If you qualify for payments but would prefer to opt-out, the deadline to do so is 2nd August 2021.
DISCLAIMER: WorldRemit and its affiliates do not provide financial advice. This article has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial advice. You should consult your own financial advisers before engaging in any transaction.
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