The time is now running out for families to sign-up to get the upgraded tax credit for children and to receive benefits this year.
The site, which was developed through Code for America and the Treasury Department, is for families with children who are that are eligible for the tax credit but did not receive it automatically this year, typically because they didn’t earn enough money to fill out an income tax return.
« If parents haven’t already gotten the payment and they’re eligible for it, it’s not too late to sign up, » said Ashley Burnside, a policy analyst with the Center for Law and Social Policy.
One large December check
Anyone who enrols for the credit today will receive the entire first portion of credit in December. This means they’ll get one big check in the coming year.
This is because the monthly cash is an advance to a tax credit. Half of it will be handed out this year, and the remaining to be distributed when families file their tax returns next year.
The American Rescue Plan passed in March, which expanded the tax credit for children, including advance payments every month and increasing the amount to $3,000, up from $2,000 and an additional $600 for children younger than 6 in the tax year 2021.
If a family has two children between 5 and 7 who are eligible to receive the full credit, the amount they’ll receive will be around 6600 dollars ($3,000 for the seven-year-old, plus $3,600 for the 5-year-old.)
If they had filed the tax return in 2019 or 2020 and made direct deposits, the family would receive the first $3300 of the credit in six monthly instalments from July until December.
But if the family isn’t typically tax-filing because they earn less to qualify, they’ll need to sign up for the monthly instalments. If the family could not make the July instalment but had signed up for the tax in August as the 1 million people did, the family would still get $3,300 at the year’s closing date.
What is the reason it is sensible to sign-up now?
For the sake of certainty, if the family does not enrol in the tax credit for children this year, they’ll miss out on advance payments, but you can still receive the cash in a lump sum the following year when they file the tax return.
However, they’ll be able to receive the funds several months after it was supposed to be distributed and will need to contend with problems with IRS delays.
Experts recommend that all parents who have an eligible child must join at the earliest time they can and are able unless they’re in the same family that knows they’d like to withdraw and get the benefit in one lump sum later in the year.
« We would hate for money to be left on the table when people are hungry, when people have housing insecurities, food insecurities, » said Otis Rolley, senior vice president of the U.S. equity and economic opportunity initiative of the Rockefeller Foundation.
It could also be crucial for families to take advantage of the cash now since the tax-free child credit is not likely to last for a long time. Democrats fight to extend the tax credit for a second year; however, that could change as lawmakers continue to debate the President’s Build Back Better strategy.