For many families, it is a struggle to find the money for school clothes and other necessities. This is because of the high cost of living in this country. It can be even harder when you are working hard but earning low wages or don’t have any income at all. There are some government assistance programs that can help with these expenses as well as free tax credits available to everyone, no matter their level of income or family size.
The Child Tax Credit is a tax credit that can be worth up to $1,000 for each qualifying child. It’s designed to help offset the costs of raising children and encourage people to have more kids.
The child tax credit is a federal income tax credit for families with children. It can be worth up to $1,000 per qualifying child under the age of 17. The amount you get depends on your income and other factors such as investment income and whether or not you pay alimony.
The Treasury Department announced on Monday that nearly 39 million households will see a bump in their household income come July 15 when the expanded Child Tax Credit begins.
How many credits you will get:
An American Tax Plan Act payment is to be issued in November or December this year. This plan will provide a $500 per month amount for each child younger than 17 years of age, and up to $300 monthly payments for those under the age six ($3,000 total), which includes families who have children that are pregnant during 2018 but don’t deliver until 2019. The direct deposit amounts are scheduled on the last working day of every month through December 31st with paper checks being sent out as well if needed–most likely when funds run low because more people claimed their tax credits than expected!
The tax credit for parents makes it easier to invest in their children’s education.
Previously, the tax credit was up to $2,000 per qualifying child under the age of 17 and claimed yearly on income taxes. Now there are two options: either take monthly installments from July-December 2020 that continue until 2022 or claim all remaining credits on your return when you file next year (2022).
How payment will be sent:
The payments will be automatically sent to those eligible. Parents need not do anything to get the payments, but there is a portal for individuals who want their payment all at once when they file their income taxes and opt-out of receiving monthly installments. The credit goes towards people with an annual salary up to $150,000 that are heads of households making up t$112,500 or married filing jointly where both spouses earn under $75k annually.
The US Treasury Department has announced that 88% of children in the United States will receive monthly payments as a result of 2020 tax returns. The amount per person is determined by last year’s taxes and if those have not been filed, then 2019 will be used to determine eligibility for the credit instead. Democrats are hopeful they can make this payment permanent under their American Rescue Plan Act rather than it only lasting one year like current law says.
“The pandemic is driving families deeper and deeper into poverty, and it’s devastating,” said Rep. Richard Neal, D-Massachusetts, chairman of the Ways and Means Committee. “This money is going to be the difference in a roof over someone’s head or food on their table. This is how the tax code is supposed to work for those who need it most.”