The administration of Biden has introduced an advanced child tax credit program. This program is aided with a $1.9 trillion economic package. And this program is called the American Rescue Plan, and it was passed in March.
Through the newly expanded child tax credit, about 39 million Americans are appropriate for this monthly payment of up to $300. On Monday, The IRS and US treasury department announced. This tax program will start on the 15th of July.
The child tax credit program increases the present tax benefit from $2,000 to about $3,600 for the young kids, and for older individuals, it will reach $3,000 for the 2021 tax year.
On Monday the president Biden stated for the working families with children that this tax cut directs a message ‘’ help is here’’.
How does this child tax credit program work?
In tax credit program, eligible families will qualify up to $300 per month for every child under six years and $250 for every child from 6 to 17. So, a family having three children of 4, 8, and 16 years can see an extra $800 every month in their bank accounts over the remaining half year. And once a child reaches 18, these credits will go away.
Depending on the parent’s income, the amount could be smaller. The IRS said 2020 tax returns would decide the final payment amounts. It urged those who still have to apply for this program, do it as quickly as possible to ensure whether they are eligible or not for the appropriate amount.
According to the estimation of Biden, about 90% of families with children will be eligible for this new tax relief automatically.
the IRS issued basic guidelines:
- Widows or widowers with income less than $150,000 will be eligible for full refunds.
- Married parents filing joint returns will be eligible for this credit.
- According to IRS, the amount is reduced for those couples who have income more than that.
- Those individuals who cannot make enough money to recompense taxes can also see more money this year.
The IRS stated that qualified taxpayers, who don’t want the advance payment, prefer to preserve the full child tax credit till next year. They can decline the checks.