THIS week, the IRS has sent out $15billion in child tax credit payments to eligible parents.
Use a child tax credit calculator to see how much money you are qualified to receive through direct deposit or a check in the mail.
Full payments of $300 will be granted to each child under the age of six years, while $250 will be given to each kid between ages six and 17.
You will receive these payments each month until December unless you opt to receive the money in one in one sum next year.
While using the calculator on Cnet.com, it will be explained how “the math and other requirements work in determining your family’s credit account” if your payment doesn’t add up, according to the outlet.
It will also teach you how to manage your child tax credit payments when signing up with the IRS and let you know what to look out for during next year’s tax season.
How to use the calculator
Whatever the total sum the child tax credit calculator says you will receive between July through December 2021, divide that number by six to see what the IRS will send you each month this year.
To break it down, the IRS will grant up to $3,600 for kids up to age six, divided by six monthly payments and half as a 2021 tax credit.
Payments up to $3,000 will be given to eligible parents with kids aged six to 17, divided the same way.
College students or dependents age 18 through 24 will get a one-time payment of $500 in 2022 by the IRS.
Single filers with an AGI of $75,000 or less, $112,500 as a head of household, or $150,000 filing jointly will receive the full payment.
You will receive $50 less in child tax credit payments for every $1,000 if your income is over that, meaning, you might not receive full payment if your household income is too high even with a young child.
Do newborns qualify?
If you have a child born in 2021, you are eligible for the 2021 tax credit of $3,600 per child and double for twins.
This is in addition to payments you receive from other qualified child dependents claimed.
This information includes parents of adopted infants.
What if you don’t file taxes?
In order to get your automatic payments from the IRS, you must have filed your 2020 tax return or claimed dependents on your 2019 tax return., otherwise, the IRS will not know who to send a payment to and also won’t know if you’ve added any dependents since the last filing.
You can use this IRS Non-filer Sign-up tool if you are a non-filer and did not file a tax return this year.
This form allows families to submit how many kids they have and their ages, including 2020 and 2021 babies, to receive proper payments from the IRS.
The tool, designed to assist low-income families, works better on a computer than a mobile device and requires you to have an email address and understand English.
What if you prefer one payment next year?
You can unenroll from months payments through the IRS online portal if you prefer to receive your 2021 child tax credit in one large sum.
This means you would wait until your taxes are filed in 2022 to receive your full payment.
You need to unenroll three days before the first Thursday of the month to stop advance payments, for example, you would have to unenroll by an August 2 deadline to not receive an August 13 payment.
You can check the status of your payments and make updates to your information on the IRS portal.
What if you share custody of a child?
Only one parent can claim monthly advance child tax credit payments if you share custody.
When claiming the tax money, be sure to fie the child correctly so you don’t have to repay some or all of the money.
How to avoid overpayment
Since your eligibility largely comes from your AGI, use the IRS Child Tax Credit Portal to constantly update your information.
The IRS will adjust and lower payment amounts if there is a change to your income, according to Garrett Watson, a senior policy analyst at Tax Foundation.
You will have to either return excess money on your 2021 tax return, accept a smaller 2021 refund or owe more in taxes if you wait until 2021 to upset your information when filing taxes.