In March of this year, Congress increased the maximum credit amount that families could receive per child. The extra credit will be added on top of the normal child tax credit of $2,000 per child for children under the age of 18 years old. The new extra credit amounts to be added to the original base of $2,000 will be an additional  $1,600 per child under the age of 6 and an additional $1,000 per child between the age of 6 and 17 years old.

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Maximum Payment Amounts to be received Based on Age of Children

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Child Tax Credit Expansion Payments will begin on July 15, 2021. This credit will be paid out by the Internal Revenue Service in monthly installments, on the 15th of every month, starting this July. 

 

Limitations

The amount of the credit starts shrinking once income rises above $75,000 for individuals, $112,500 for heads of household, and $150,000 for married couples. Taxpayers will lose $50 of credit per $1,000 of income above the threshold for their filing status.

 

Payment Delivery

If you have already filed your 2020 tax returns and you qualify, you should receive your first payment starting in July. Payments will come in the form of either a direct deposit, check, or debit card. The IRS registration system, located on their website, is available to all individuals even if you do not use the system for normal/usual tax returns.

 

For more information on tax credits or the Child Tax Credit Expansion please contact us to speak directly with our partners:

 

Manish Seth 

manish@sethandalexanderadvisors.com

(713) 965-7572 ext 701

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