More Stimulus Money
Beginning on July 15, 2021, some taxpayers may find that they are receiving the Advance Child Tax Credit that is designed to help many people deal with the economic hardships that have come from the global pandemic. Sometimes this is referred to as the next “Stimulus”. The revisions to the Child Tax Credit will pay families in advance, monthly, for up to half of their total expected credit. THIS IS NOT EXTRA MONEY THAT THE GOVERNMENT IS SENDING. RATHER, IT IS AN ADVANCE OF THE CREDIT THAT YOU WOULD GET ON YOUR 2021 INCOME TAX RETURN.
The other half of the credit will be received when the tax return is filed. It is important to note that as of now, the changes to the law only apply to the 2021 tax year.
Who Gets the So-Called “Advanced Stimulus Money”
There are qualifications that you need to be aware of to receive the advance payment. You, and your spouse if you filed a joint return, must have filed in 2019 or 2020 claiming the Child Tax Credit. Otherwise, you may provide your information in 2020 to the Internal Revenue Service (IRS) using the Economic Impact Payment Tool. Other important requirements include having a qualified child with a valid social security number under the age of 18 at the end of 2021 and having a main home in the United States (50 states and the District of Columbia) for either you or your jointly filing spouse occupied for more than half of the year. The credit will also be phased or reduced for those taxpayers above the thresholds of the set income limits. The IRS will automatically determine who qualifies and will enroll taxpayers in the payment program with no additional action being taken.
Making Changes to Your Account
Taxpayers may use this tool to make changes to their account, including adding and removing bank accounts for direct deposits of the new payment. You may also make changes to your account that affect your payment amount. These changes would be put into effect starting in August. For more information on the Advance Child Tax Credit, visit the IRS website or contact us at Valentine CPA at help@the-tax-coach.com
