New Changes to Child Tax Credit in 2021
Beginning July 15, families in New York City may see a direct deposit in their bank accounts. For those who qualify for the Child Tax Credit (CTC), automatic payments will be sent out on the 15th of each month for the rest of the year. If bank account information is not on file, families will receive a check in the mail instead.
According to Gothamist, “an estimated 275,000 to 400,000 of New York City’s neediest families will be able to join the program.” One of the reasons for this significant shift is that the program no longer relies on tax return information to qualify.
The CTC now has a Non-Filer Sign-Up tool that allows low-income families to register for the program in lieu of filing a tax return. All American families can qualify for the CTC advance payments, but neighborhoods such as the Bronx in New York City will likely see as many as 60% of families newly eligible for the tax credit.
The six monthly cash installments are advance payments for the 2021 Child Tax Credit, accounting for half of the total. The remaining half will be included as a tax credit in 2022. Due to the changes made under the American Rescue Plan, the amounts for the program have increased.
Families with children over the age of six will receive an extra $1000 a year per child. Families with children under the age of six will receive an extra $1600 a year per child.
Who qualifies for the advance Child Tax Credit payments in 2021?
- Individuals with an adjusted gross income under $75,000
- Married couples with an adjusted gross income under $150,000
- Families with a combined income more than $400,000, the credit will be gradually reduced to less than $2,000 per child
How will qualifying families receive the monthly checks?
If you are just hearing about the changes to the Child Tax Credit policy, and your income qualifies you for the advanced payments, you will receive a direct deposit or check on or around July 15. The amount you receive will be based on your most recent tax return. Most families will receive a payment in the amount of $250 - 300 per month.
Who should opt out of the advanced Child Tax Credit payments?
If your income has increased in the last year, you may want to opt out of the advanced payments in 2021. The CTC amounts may be based on your 2019 or 2020 income, and if you no longer qualify for the full tax credit, you may need to repay the money you receive.
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