The Child Tax Credit is a part of the America Rescue Plan, a recovery program instituted by the Biden Administration to assist families through the Covid-19 pandemic. Beginning on July 15, 2021, eligible families will receive $300 per child under the age of 6 and $250 per child between ages 6 and 17. The payments are automatic and in most cases will be direct deposited into recipients’ bank accounts.
The Child Tax Credit is available to most families with minor children. There are some requirements, however.
First, the parent(s) must have filed a tax return in 2019 or 2020, or filed for a stimulus check from the IRS. Families that do not earn enough to file a tax return can sign up here.
Second, there are income limits. Parents are eligible so long as they earn under $112,500 a year for a single parent household, or $150,000 per year for a couple.
Lastly, the credit is available to families who have a primary residence in the United States for at least one half of the year, and the child must have a valid social security number.
The payments will continue on a monthly basis until December 2021. The Biden Administration has proposed extending the program as part of the America Families Plan, an economic, infrastructure, and tax plan meant to, in part, provide “education and childcare, tax relief for American families, and reduction in child poverty.” You can learn more about the proposal here.
Whatever you want! There are no use restrictions on the child tax credit payments.
One use of the additional funds for your family is to create a comprehensive estate plan to ensure that your children will be cared for and loved the people you trust. If you have no yet created an estate plan for your family, contact us today to schedule your initial consultation.