Most households don’t have to do anything to get it since the IRS already has their 2020 or 2019 returns. Roughly 39 million households, covering 88% of children, will start receiving the monthly payments automatically.
“The stimmies have been fantastic for us in terms of getting into the communities,” Rettig said, referring to the stimulus payments.
Sending more money to families for 2021
The enhanced credit gives families up to $3,600 for each child under 6 and $3,000 for each one under age 18. This is up from the existing credit of up to $2,000 per child under age 17. The enhanced credit will be available for single taxpayers with annual incomes up to $75,000, heads of households earning $112,500 and joint filers making up to $150,000 a year.
The relief package also makes the tax credit fully refundable so that more low-income parents can take advantage of it. Until now, it has only been partially refundable — leaving more than 20 million children unable to get the full credit because their families’ incomes are too low.
Lawmakers also wanted to make it easier for parents to use the funds to cover their expenses during the year so they are providing half of the enhanced credit in monthly payments. Families can claim the rest at tax time.
The provision is projected to cost roughly $110 billion a year.
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