By Professor Anthony Rivieccio MBA PFA
Firstly, it’s not free!.
As of July 15th, most families are automatically receiving monthly payments of $250 or $300 per child without having to take any action. It’s called The Child Tax Credit
The American Rescue Plan increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17. All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).
If you’ve filed tax returns for 2019 or 2020, or if you signed up to receive a stimulus check from the Internal Revenue Service, you will get this tax relief automatically. You do not need to sign up or take any action. Note however, this is for tax year 2021 ONLY
Low-income families with children are eligible for this crucial tax relief too – including those who have not made enough money to be required to file taxes. This is why President Biden wants to extend the Credits- for years and years to come.
The way the credit works is both very simple & complex.
To get money to families sooner, the IRS began sending monthly payments (up to half of your total amount) this year, last week.
The plan, is it will be broken up into monthly payments, which means payments of up to $300 per child under age 6 and $250 per child ages 6 to 17.
You’ll get the remainder of the credit when you file your taxes next year
Which in some ways means, your next year’s tax refund- will be LOWER
You may be eligible for Child Tax Credit payments even if you have not filed taxes recently.
In 2021, ( tax year 2020) Americans were only required to file taxes if they earned $24,800 as a married couple, $18,650 as a Head of Household, or $12,400 as a single filer. If you had total income in 2020 below those levels, you can sign up to receive monthly Child Tax Credit payments.
If you believe that your income in 2020 means you were required to file taxes, it’s not too late. You can still file a return to get monthly Child Tax Credit Payments in 2021, as well as other tax benefits or a refund you are eligible to claim.
Well, I guess it’s good that we are using our tax system to provide relief to parents with children. A 15-33% increase in monies. In theory you do want to receive the money in advance as opposed to holding the credit to next year’s tax filing
On the other hand, many will spend it- which while it’s purpose—but what about the purpose that most low and middle income class people have had for decades- to use their tax refund as a forced saving– the tax refund will be less.
Will people be mad? Probably! Will they blame the Govt? No! Will they blame their tax person? Get ready professionals, were gonna be attacked again.
Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 25th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Kiplinger’s Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Co-Op City News, The Bronx News, thisisthebronX.info and The Bronx Chronicle. Mr. Rivieccio also pens a financial article called “Money Talk”. Anthony is also currently an Adjunct Professor of Business, Finance & Accounting for both, City University of New York & Monroe College, a Private University. For financial assistance, Anthony can be reached at (347) 575-5045. Have Facebook? Our professional page is: www.facebook.com/iwantmytaxmoney