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But on Tuesday, when Sen. Sherrod Brown, an Ohio Democrat and a senior member of the Senate Banking Committee, asked Rettig if the IRS would be prepared to initiate monthly tax credit payments in July, he had a simple answer. .
“We are,” Rettig said. “If we end up without an unforeseen situation, we will advise you and the committee.”
$ 300 a month for children under six
Full credit is available for people who have children and have a adjusted gross income of less than $ 75,000 or $ 150,000 for a married couple who file together. The benefit will be phased out for taxpayers who earn more money and will cease for people who earn $ 95,000 and married couples who earn $ 170,000 by filing jointly.
The credit is expected to be disbursed to families monthly from July and will continue through December 2021. The monthly amounts will generally be $ 250 for older children and $ 300 for children under six. Families will claim the remaining half of the credit when they file their 2021 or 2022 income tax return.
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Child tax credit is an important component of the plan to lift millions of children out of poverty. A family of four earning less than $ 150,000 could get more than $ 14,000 in pandemic relief this year due to the extended child tax credit and $ 1,400 stimulus control for both adults and children.
According to a study by the Institute of Taxation and Economic Policy, around 83 million children live in households that would benefit from the extension of the tax credit for children. In addition, 20% of the poorest families would see their income increase by more than 37% during the year the policy is in place.
However, one of the criticisms is that it only extends the credit for one year. After 2021, extended credit will cease and households will see a smaller increase in their income unless additional legislation is passed to continue or build on the new rules.
To see how much you can expect to receive, the personal finance website Grow created a calculator that takes into account your filing status, annual income, and the number of dependents you have.