$3,600 Stimulus Payments for Families to Start in July
In statements made to a Senate hearing committee, IRS Commissioner Charles Rettig laid out payment plans for the new child tax credit as a part of the stimulus relief bill.
The current goal is for the IRS to begin payments in July. While there is no guarantee just yet, Commissioner Rettig stated, “If we end up not being on track for some unforeseen situation, we will advise…the committee.”
In a push to make sure these payments are on the timeline proposed, Sen. Michael Bennet (D- Colo.) said during the hearing, “Expenses like diapers, formula and child care can’t wait until tax time. Monthly payments are particularly important during the pandemic, with so many low- and middle-income families experiencing significant challenges.”
The payments will be monthly in amounts of $250 to $300 per child, increasing the maximum to $3,600 for children under 6 and $3,000 for children from 6 to 17 years old.
The new tax credit comes with restrictions: higher income earners won’t qualify for the full amount. If you make under $75,000, you most likely qualify for the full amount. For each $1,000 of income above $150,000 for a jointly filing couple or above $112,500 for single head of household filers, the credit will be reduced by $50.
Rettig also told the committee that the IRS expects to hire 1,000 additional customer service representatives to address potential call volume increases. His statement on the increased hires comes after concerns that a new taxpayer portal and procedures being implemented to process the payments will cause delays in the time it takes for the payments to arrive.
Now is a good time to update any income and dependent information with the IRS. Making sure all your information is current before May 17 will ensure you do not receive extra funds you might have to pay back on your next tax return.
These increased tax credits are expected to make a significant impact, especially on lower income families. American Progress reports that “these reforms would dramatically reduce the childhood poverty rate, cutting childhood poverty by 52% for non-Hispanic Black children and 45% for Hispanic children.”
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