ARKANSAS, USA — If you are a parent, you are in luck because the Internal Revenue Service will soon start sending out child tax credit payments.
The IRS tax credit portal is now open ahead of the first monthly payments set to go out on July 15.
“If they filed a tax return for 2020 and those children, they are claiming on that 2020 tax return. So they don’t have to do a thing. They are going to start getting it automatically,” Trish Walker said.
The child tax credit is part of the American Rescue Plan Covid Relief Bill. Parents will get $300 a month for children 5 and younger and $250 a month for kids who are 6 to 17. Trish Walker is a tax preparer with Westark RSVP and says a single parent qualifies if they make $75,000 or less, and couples who make $150,000 or less a year also qualify.
“In the years past, the child tax credit has only been $2,000 per child with a refundable amount of $1,400. This year if they have no income, their refundable portion will be the full amount,” she said.
Walker says some people out there want to opt out of the monthly payments, which can easily be done on the portal.
“If they have a higher income and they need that to take care of their tax liabilities next year when they file their return, they may not want to get half of their advance payments upfront,” she said.
These monthly payments will only be made for the rest of 2021. University of Arkansas Economist Mervin Jebaraj says this new child tax credit cuts the child poverty rate in the U.S. by half.
“In Arkansas, it would directly provide cash to 324,000 in the state, which covers about 94% of children in the state and will lift about 48% out of the poverty line,” he said.