While many parents have figured out where they land for the child tax credits that begin July 15, there are some considerations worth the attention.
Child tax credit checks likely won’t be checks. Much like the stimulus checks, Americans that have filed their taxes using direct deposit will receive the tax credits the same way. Those not enrolled will receive checks, but are encouraged by the IRS to update their information to receive the money sooner.
People can still get the child tax credits that don’t owe taxes. In the past people weren’t eligible if they did not owe taxes but this year that is not the case. The benefits are designed to bridge the gap for lower income families.
This year, people that qualify can claim certain expenses of up to $8,000 for one eligible child or $16,000 for two or more. The amounts are twice the prior limits and the benefit will begin phasing out at higher incomes.
There is time to opt out of monthly CTC checks. The checks that are going out this year are part of next year’s refund, and by opting out next spring people may get less back or owe a bit more.
If people would like to receive a bigger refund next year instead of smaller monthly checks this year, there is the option to opt out.
Finally, being aware of rising income is important. If someone was on unemployment last year and isn’t this year, or received a big enough raise to be pushed into the income that goes to phase-out levels, they may be getting money they aren’t going to be owed next year, resulting in needing to pay it back next tax season.
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