Millions of American families are getting the financial help they need as the third round of 2021 child tax credit payments go out. The IRS is distributing the direct aid payments through the American Rescue Plan.
The payments go above and beyond the $1,400 stimulus checks that went out to any individual who earned less than $75,000 last year or married couple under $150,000. The enhanced child tax credit payments of $250 or $300 will continue through the end of the year.
Parents with children under 6 qualify for the largest monthly payments at $300 per child. Parents with children between 6-17 qualify for slightly smaller monthly payments of $250 per child.
Families have been opting out of the boost, though, as questions about tax implications loom. The benefits phase out at incomes of $75,000 for individuals, $112,500 for heads of household, and $150,000 for married couples.
The original tax credit was worth $2,000 annually, which was paid out at tax time. That is still available for individuals who make up to $200,000, or married couples who make up to $400,000 per year.
What if you haven’t received your third child tax credit payment?
There were well-documented issues in July and August, but the IRS has not reported any major issues getting payments out this time. The biggest issue reported on Wednesday involved how quickly banking institutions released the funds into checking and savings accounts.
An entire website has been built and dedicated to getting the tax credit payments into the hands of Americans. Visit GetCTC.org to update your information.
What will it take for $250 or $300 payments get extended?
September child tax credit payments have gone out. It leaves three remaining, which will arrive on October 15, November 15, and December 15. The second half of the $3,600 total 2021 child tax credit will be distributed during tax season. Given the troubles the IRS has had with distributing tax returns in 2021 – there’s good reason for parents to be skeptical of that final child tax credit payment.
There’s growing likelihood that Democrats will find a way to include the enhanced tax credit in 2022 and beyond. In fact, the latest proposal from Congressional Democrats would have the payments continue through 2025.
At this point, it’s unclear if the payments would continue year-round, or if they would only come between July and December – as they did in this iteration of the enhanced child tax credit.
It will be expensive, though. Experts say that it will cost hundreds of billions of dollars to continue the $3,000 to $3,600 per child payments to parents the way the IRS has been distributing them in 2021.
It’s likely that child tax credit payments get extended, but members of Congress ultimately decide when they begin. The politics of passing this massive $3.5 trillion spending plan will prove challenging.