The American Families Plan includes an increase in the Child Tax Credit for qualified parents and legal guardians of children through 17 years of age. For children up to six years old, that total credit is $3,600, and for children ages 6-17, the credit is $3,000 – both an increase over the previous $2,000 that tax filers would receive annually as part of their tax return.
Beginning July 15, 2021, Americans will begin receiving monthly deposits as part of a Child Tax Credit pre-payment. The remaining 50 percent of the tax credit will be applied as citizens fill out their 2021 taxes next spring.
The Child Tax Credit could have a significant impact on families as they set goals to move toward financial stability. Community Progress Council will play an important role in working with families across York County to help determine the best ways that parents and guardians can utilitize these payments as part of their financial goals.
It should be noted, however, that federal income tax filings may be impacted by receiving these advanced payments. Americans are offered the opportunity to opt out of these advanced payments in lieu of the full tax credit being issued at the time of their 2021 tax return.
Who will receive the monthly payments?
Families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent. In order to automatically receive the advanced payments, however, individuals or married couples must have filed federal income taxes for 2019 or 2020, or signed up to receive the COVID stimulus payments.
Others may sign up using the form at ChildTaxCredit.gov.
How much will families receive?
Parents or legal guardians of children up to 6 years old will receive $300 for each child every month through December 2021. The payment for children ages 6-17 is $250 per month.
Will this money affect other benefits?
No. Receiving child tax credit payments is not considered income for any family.
Therefore, it will not change the amount you receive in other federal benefits, including unemployment insurance, Medicaid, SNAP, SSI, SSDI, TANF, WIC, Section 8, or public housing.
How do you sign up to receive advanced payments?
If someone has filed federal income taxes in 2019 or 2020, or they signed up to receive the COVID stimulus payments, there’s no need to do anything. Advance Child Tax Credit payments should begin arriving in July 2021.
All others may sign up for the Child Tax Credit pre-payments using the button below.
Needed to sign up are the full names, mailing addresses, social security or tax ID numbers, and dates of birth for applicants and dependents; email address; banking account and routing numbers; and an IRS pin number if available.
Note: You do not need a fixed address to apply for advance child tax credit payments.
How do you opt out of receiving advanced payments?
If someone wishes to opt out of receiving advance payments of the Child Tax Credit for any reason, and instead receive the full credit at the time they file 2021 taxes in the spring, they should click on the button below and click on “Manage Advance Payments” to opt out.
How will these advanced payments affect my tax return?
Federal income tax filers may see a change in their normal returns or refunds, as a portion of this Child Tax Credit is being issued as a pre-payment.
How can CPC help residents of York County?
While there is no one-size-fits-all way that residents can utilize these advanced payments, the coaches at Community Progress Council can work with residents of all income levels to determine how to utilize this money to advance their financial goals and begin planning for the future. Additionally, coaches can help residents understand that their tax filings for 2021 might be different and how to best plan for that change.
You can contact a CPC representative to talk about the Child Tax Credit and how you can best spend your advanced payments by calling (717) 846-4600, ext. 270, or email email@example.com.