the extensivefor 2021 differs from previous years in two important ways: first, the amount has been increased, for each eligible child under age 6 (and $3,000 for older children). New parents can rest easy – at least when it comes to the child discount – because babies born or adopted in 2021 will is indeed eligible for the full payment of $3,600.
And second, from July 15, payments will be made in monthly installments instead of being included in your tax return (). will receive up to $300 per month per child between July and December, totaling $1,800, and the other half of the check will arrive next year with the tax refunds. But since the IRS won’t know about new dependents until next tax season—that is, April 2022—many parents wonder if they’ll see monthly checks or if they’ll have to recoup what they’ve paid. are due when they file next spring.
Theby 1 July specifically for the children’s discount. Families that need to change their status, including the addition of new dependents since last year, can use these portals to ensure they receive their credit in monthly installments. Read on to learn more about how the portals might work and how you can use them to claim the credit for babies born or adopted in 2021, or new dependents not listed on your 2020 return . Plus, here’s how to claim an extra and what we know about a .
How much is the extended child discount worth to new parents?
The child discount in 2021 has changed since last year, in particular the increased benefit amount. The 2021 new newborn credit caps at $3,600 per eligible child, and decreases from there as your income increases. The IRS uses severalphase-out limits (when your income is too high to qualify for the full amount of credit) for individual applicants, heads of household and married couples applying jointly. , which you should definitely try especially if you also have older children (children from 6 years are eligible for less), or do not have US citizenship.
When will the benefits of my child discount actually come in?
Unlike stimulus checks, the extended child discount is paid in two different phases. half of you, which ships from July 15 and runs through December on the 15th of each month (unless the 15th falls on a weekend or holiday, in which case the checks will likely go out the following Monday). The other half will be paid out on your 2021 tax return when you file it in 2022. Anyone who is eligible for this year and has filed a 2020 return will automatically receive monthly checks – you don’t have to file, claim, request, or otherwise track your money, as long as the IRS knows how many dependents you have.
Okay, but how can parents of 2021 babies claim the child discount?
If your family members haven’t registered with the IRS (or aren’t even born yet) in July, you have two options for getting your payment. First, you can always wait until you file your return next spring and voorjaar, just like how the previous version of the credit worked. But if you want to get monthly payments before next year’s tax season starts, there’s another option.
The IRS has promised to set up two online portals by July 1. The first portal allows taxpayers to report any change in status (dependants, income) all year round.. These families can use the portal to ensure their information is correct, including adding 2021 babies as qualified dependents.
We don’t have much information yet about how the portals will work and whether they will be available before July 1 (the IRS’s resources are still allocated to processing tax returns), but when they are revealed new parents will be able to use them to claim next of kin in time to receive the child tax credit checks they owe. Even if you go this route, you may receive more than half of your payment next tax season, depending on the timing.
What else could affect the payments and eligibility of child tax credits?
One important caveat is that both you and your child must be U.S. citizens and your child needs a Social Security Number. And another: Your child’s age group is based on their age as of December 31, 2021, so anyone who ages into the next payment bracket at any point in 2021 will be considered part of that group for the entire year. (Do you have a 5-year-old turning 6 this year? Unfortunately, you may have lost about $600.)
We’ll keep this story updated as new information emerges about the expanded child tax relief. Do you still have unanswered questions? Here isto know about the children’s discount, , how , and a . And here’s everything we know so far about a potential and .