The $ 3,000 child tax credit may not be sent over monthly payments

Marko Geber | DigitalVision | Getty Images

The child tax credits approved in the latest Covid relief bill may not be sent out monthly and may not even start in July, said IRS Commissioner Charles Rettig.

The US $ 1.9 trillion rescue plan, signed by President Joe Biden on March 11, included a significant increase in child tax credits. Under the law, families will receive an annual benefit of $ 3,000 per child ages 6-17 and $ 3,600 per child under 6 years of age for the 2021 tax year.

Payments to families should start in July and be sent monthly rather than the flat rate suggested by House Democrats. But that couldn’t happen, especially now that the IRS has extended the tax filing season for individuals from April 15 to May 17, Rettig said during a hearing Thursday with the House Ways and Means Committee.

More from Invest in You:
Suze Orman: Don’t invest in your stimulus checks. Here is what to do
Women are more financially stressed. Here’s how to overcome it
Women lag behind men in saving for retirement. Covid made it worse

That’s because the IRS now has less time to implement and launch a portal for the program, which has to be done by July 1, Rettig said.

“I don’t have the resources to devote myself to this portal until the filing season ends,” said Rettig.

Additionally, according to Rettig, the IRS may not be able to send monthly payments, at least initially.

To see how much to expect, the personal finance website Grow has created a calculator that takes into account your enrollment status, annual income, and the number of your loved ones.

“It could be a challenge to get it up and running every month,” said Rettig. He noted that the final invoice changed the language to payments that were sent regularly instead of monthly, which gave the agency more flexibility.

“We’re focused on getting these payments to people in a meaningful way and in a meaningful timeframe,” he said.

You must file a tax return to receive the child tax credit

Rettig also reiterated the importance of filing a tax return this year for all individuals and families, even if they have not done so before. The IRS needs the return in order to send the tax credits to eligible individuals, he said.

Additionally, filing a 2020 tax return is the only way to claim stimulus payments that you were eligible for but did not receive.

And people who have not filed a record in the past may be able to take advantage of other tax breaks beyond the child tax credit, Rettig said.

The full loan is available to those with children who have an Adjusted Gross Income of less than $ 75,000 or $ 150,000 for a married couple applying together. The benefit will expire for taxpayers making more money and ending for individuals making $ 95,000 and married couples making $ 170,000.

SIGN IN: Money 101 is an 8-week financial freedom learning course delivered to your inbox weekly.

CHECK: Single mom earns $ 10,000 a month in outschool: “I could never have made as much money as a normal teacher” above Grow with acorns + CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

Comments are closed.