Enhanced child tax credits set to roll out Thursday
EVANSVILLE, Ind. (WFIE) - About 39 million American households are set to get a little extra cash Thursday as part of President Joe Biden’s enhanced child tax credits.
It is expected to cover 88% of the nation’s children, according to experts.
Depending on family income and the age of the child, families could see up to $300 a month per child.
However, local financial experts say there are few things you should know before spending that extra cash.
Ben Joergens is the financial empowerment director at Old National Bank.
Child tax credits are obviously designed to help families care for their kids.
“Obviously, some expenses with diapers and formula and necessities with kids,” says Joergens. “That’s great.”
Joergens understand this need, as a father of three. As a financial empowerment director, he says saving the extra cash could a good idea too.
“In my opinion,” says Joergens, “in case something like this every happens again, we hope it doesn’t, but in the case that it does or any emergency, it would be great to have that money in the bank.”
Who qualifies for the enhanced credits and how much do they get?
“When you look at the single tax filers,” says Joergens, “you are looking at an income of $75,000 or less. Married filing jointly, you are looking at $150,000 or less, and then those heads of households, you are looking at $112,500.”
Families will get $3,600 dollars total for each child up to 6 years old and $3,000 dollars total each child 6-to-17 years old.
Joergens says there are essentially two rounds of payments: the first half will come in monthly installments starting Thursday, running through December 2021.
The second half will come in April 2022.
Below is the breakdown of payments per child.
Month Payment 5 and under 6 to 17
July 2021 $300 $250
August 2021 $300 $250
September 2021 $300 $250
October 2021 $300 $250
November 2021 $300 $250
December 2021 $300 $250
April 2022 (2nd ½) $1,800 $1,500
If a family falls above the income threshold, Joergens says they will still get the regular $2,000 dollar child tax credit.
What happens if your child ages up or out during the payment, like 5 and 17-year-old’s, for example?
Joergens says that extra money will be owed back to the federal government.
“Am I going to owe money or not?” asks Joergens. “So you can always withhold that and then get the full benefit when you file taxes in the form of a tax credit at the end of the year.”
Joergens says families should have gotten a letter in the mail explaining what payments to expect, and they should expect another one in January to help with filing taxes.
These enhanced credits are based on the 2020 taxes, so if need be, families can also sign up for direct deposit or change their bank account through the Child Tax Credit Update Portal.
Below are the deadlines to change or sign up for direct deposit enrollment.
Payment month Unenrollment deadline Payment due
July June 28, 2021 July 15, 2021
August Aug. 2, 2021 Aug. 13, 2021
September Aug. 30, 2021 Sept. 15, 2021
October Oct. 4, 2021 Oct. 15, 2021
November Nov. 1, 2021 Nov. 15, 2021
December Nov. 29, 2021 Dec. 15, 2021
Joergens says these enhanced credits should not effect any other federal benefits or programs.
He says these payments do not count as income, so federal, state and local agencies cannot use the amount when determining if you or your family is eligible for other benefits or assistance.
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