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The sixth—and possibly final—payment from the Child Tax Credit program should be deposited in the bank accounts of eligible parents today, Dec. 15. Those who have their checks mailed can expect them to arrive over the next few days.
How much will your December Child Tax Credit be?
Like previous payments, most eligible filers will receive either $300 or $250, depending on the age of their child. Under the current program, eligible parents with children under age 6 receive a total of $3,600 in tax credit in 2021, with half distributed monthly and half to be claimed on 2021 tax returns. Parents with children between 6 and 17 receive $3,000 split the same way.
Is December’s CTC payment the last?
Future Child Tax Credit payments are in limbo. An extension of the benefit is part of the Build Back Better Act being debated in Congress now. If it becomes law, there will be CTC payments for another year. If it doesn’t pass, Child Tax Credits will revert to a pre-pandemic level: A $2,000-a-year tax credit, without monthly payments.
Who is eligible for Child Tax Credit payments?
The payments are aimed at low to middle income families, with full payments reserved for single-parents making less than $95,000 and couples making less than $170,000 per year. Higher earners receive reduced amounts, depending on their incomes.
How do I claim my Child Tax Credit benefits?
Unless they opted out of monthly payments, eligible tax payers were automatically enrolled in the program in July of this year. Those who elected to not take monthly payments can still receive the full benefit as a credit applied to 2021 taxes.
Are Child Tax Credit payments taxable?
CTC payments are not taxable, as the IRS considers them advanced payment of a tax credit as opposed to income.
One potential pitfall to be aware of: CTC eligibility and payment amounts were based on income reported on your 2020 tax filing. If you earned enough in 2021 to put you in a different bracket or make you ineligible, you may be receiving more than you are entitled to, and will have to make up the difference on your 2021 taxes.
How the Child Tax Credit will affect your tax-filing
In January, the IRS will send “Letter 6419" to all citizens who received CTC payments in 2021. This letter details the amount of CTC payments you received. According to the IRS, you should keep this letter to refer to when filing your 2021 tax return. If you fill in the wrong amount for your CTC payment, it could delay the dispersal of your federal tax refund.
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