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There is good news for families who traditionally do not pay taxes but have children who are eligible for the new, extended child tax credit.
They will soon be able to send their information directly to the IRS without filing a tax return to ensure they receive the monthly payments, which are due to start on July 15th.
The IRS is expected to launch two portals in June where families can enter more up-to-date information on the improved child tax credit, the House Ways and Means Committee said Thursday. The committee also published an information sheet on the new extended credit.
A portal allows those who traditionally do not file a tax return but are eligible for credit to provide the IRS with the information it needs to receive monthly payments.
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“I think it’s great news that the IRS has made it publicly clear that non-applicants will be able to claim the Child Tax Credit,” said Elaine Maag, research fellow at Urban-Brookings Tax Policy Center. adding that a lot of these people are outside of the tax system, which is so difficult for the IRS to achieve. “Notifying nonprofits and agencies working in communities early on will really be critical to getting people enrolled.”
Those who traditionally don’t file tax returns tend to have very low incomes and are exactly the families that the legislature wants to aid with the monthly payments through the loan, she said.
Another portal is intended to help families who have submitted a tax return processed by the authorities in 2019 or 2020 to provide more up-to-date information on their household. This is important for families who have more eligible children, a change in marital status, or a significant drop in income in 2021 – all of which could mean that the loan will owe them larger monthly checks.
This portal also allows families to opt out of receiving the monthly payments, which means they will receive the full credit amount when they file the taxes for 2021. (The monthly payments are an advance on a 2021 tax credit.)
The child tax credit was enhanced by the American Rescue Plan, which was enacted in March by President Joe Biden. The new extended loan increases the annual benefit per child aged 17 and under from $ 2,000 to $ 3,000 in 2021. There is also an additional benefit of $ 600 for children under 6 years of age.
The Full Extended Benefit is available to all children under the age of 17 in families with Adjusted Gross Income less than $ 75,000 for a single parent and $ 150,000 for a married couple in 2020 or 2019, and ends for individuals who are US $ 95,000 Earning Dollars and married couples filing $ 170,000 together (although they are still eligible for the regular child tax credit.)