- Money Management
Taking care of the whole fam: What you need to know about the expanded child tax credit
ICYMI: The government is handing out more money to help take care of you and yours. If you qualify, newly expanded child tax credit checks could be arriving in your mailbox (or on your Control Card) after July 15.
First up, the really good news: the new child tax credits are going up for 2021, from $2,000 to $3,000 for kids ages 6-17, and $3,600 for kids ages 0-6. The money won’t be sent in a lump sum, but you also don’t have to wait till tax time to benefit.
Half of the credit will be sent out in advance of next spring’s tax time as monthly payments, starting July 15. That means monthly checks of $250 for kids 6-17 and $300 for kids 0-6. The rest of the money will be paid out spring 2022 when you file your tax return. For more details visit IRS.gov.
Before you start doing backflips or budgeting where you’re going to spend your new influx of family funds, here are a few things you need to know.
You can have your benefit deposited to your Control Card
If you’re eligible for the credit, you’ll need a bank to either cash a check or to sign up for direct deposit. The good news is, you can sign up for direct deposit on your Control Card if you already have one. If a friend or family member is looking to get a card on the fly after finding out they qualify for child tax credit payments, spread the love about how easy it is to sign up for their own Control Card.
And if you’re not a Control cardholder yet, you can sign up for a card and have your payments direct deposited to your card account. That means no waiting by the mailbox for your check to show up. You can get paid faster* than a paper check with direct deposit.
Your tax filing info needs to be up to date
If you want to get the child tax credit, the IRS has to know who and where you are – and that you’ve got dependents.
Anyone who’s filed a 2019 or 2020 tax return is basically on autopilot to get their credit the same way they got their tax refund, either by check or direct deposit. In fact, you should be getting a letter (if you haven’t already) from the IRS that tells you exactly how much your household should be receiving and on what schedule.
If you weren’t required to file a tax return in the last two years, don’t sweat it. The IRS has set up a new portal where you can fill out your information and get signed up for advance payments. If you qualify, you can get your funds sent right to your Control Card!
If you’ve moved, changed banking info, had another kid, or seen your income drop, the IRS needs to hear from you too. Use this portal to update your info and find out if you’re eligible for the credit, then set up your direct deposit info to get your payments onto your Control Card.
The expanded credit will benefit more families than ever – and might be here past 2021
Every working family with children that’s making less than $150,000 a year for a couple, or less than $112,500 for a family with a single parent (or single income earner) could qualify to get the expanded credit.
New babies and grownup babies are still eligible
If you had (or are having) a baby in 2021, you could still claim the credit. You just need to sign up on the IRS’s Child Tax Update portal to let them know about your little bundle’s arrival. Same goes if you’ve added a new dependent to your household that wasn’t on your last tax return – through adoption, foster care, blending families, and other situations.
On the flip side, if you’ve got a little one who’s aging out of the 0-5 or 6-17 bracket, the government will pay attention to how old they are on December 31, 2021. That means if your kid is turning six before the end of this year, you may only be eligible for the $3,000 credit, not the $3,600 one.
Still got questions? There’s a new IRS website where you can get the official information on the child tax credit, including breaking down whether you’re eligible, how much you should be getting, and when. You deserve it!
* Faster access claim is based on comparison of a disbursement via direct deposit vs. disbursement via a mailed paper check. For up-to-date information from the IRS, visit www.irs.gov/refunds.
IMPORTANT INFORMATION FOR OPENING A CARD ACCOUNT: To help the federal government fight the funding of terrorism and money laundering activities, the USA PATRIOT Act requires us to obtain, verify, and record information that identifies each person who opens a Card Account. WHAT THIS MEANS FOR YOU: When you open a Card Account, we will ask for your name, address, date of birth, and your government ID number. We may also ask to see your driver's license or other identifying information. Card activation and identity verification required before you can use the Card Account. If your identity is partially verified, full use of the Card Account will be restricted, but you may be able to use the Card for in-store purchase transactions. Restrictions include: no ATM withdrawals, international transactions, account-to-account transfers and additional loads. Use of Card Account also subject to fraud prevention restrictions at any time, with or without notice. Residents of Vermont are ineligible to open a Card Account.