The third Child Tax Credit payment will be showing up in the bank accounts of millions of American families this week.
The payment is set to be sent by direct deposit on Wednesday, with paper checks sent on that day as well.
Those eligible for the expanded 2021 child tax credit will see between $250 and $300 a month for each child in the household.
According to the Internal Revenue Service, some 39 million families will be getting a check from the tax credit that was increased under the American Rescue Plan Act signed into law in March.
Here is what you need to know about the tax credit:
Who gets the payments?
Who is eligible for the child tax credit? You can find out if you are eligible by going to this website and answering a few questions.
Generally, for the 2021 tax year, a taxpayer filing as single will be eligible for the full credit if their adjusted gross income (AGI) is at or below $75,000. For a married couple filing jointly, the income level is at or below $150,000. If you file as a head of household, the income limit is $112,000.
How much will the checks be?
Most parents will get $300 a month for every child in the household who is younger than age 6. For parents of children ages 6 to 17, look for around $250 a month.
The payments will begin to phase out for singles earning more than $75,000 and married couples earning more than $150,000. The credit is reduced by $50 for every $1,000 over the income thresholds.
How will you get the payments?
Half of the child tax credit (six checks of $250 or $300 each) will be sent in monthly installments through December.
You will get the rest of the credit next year when you file your income tax return.
The payments will be sent by direct deposit if the IRS has your bank information on file, or by a paper check if they do not.
If you want a lump-sum payment to be used on your income tax return next year, you can use this tool to opt out of the monthly payments.
You can also go to the Child Tax Credit Update Portal to view how your check will arrive, in addition to adding or updating direct deposit information.
If you want to opt out of the advance payments, how do you do it?
If you want to stop the advance payments and use the entire credit on your 2021 tax return, you can go to the IRS’ online portal three days before the first Thursday of the next month and opt out.
If you are married and filing jointly, both spouses must opt out of the payments.
What dates will the checks be coming on?
The monthly payments will come on the 15th of every month through December.
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