Beginning last summer many families across the United States began receiving payments in advance of filing their upcoming tax returns. These monthly payments or advanced stimulus checks provided families with anywhere between $3,000 and $3,600 over the course of the past few months.
As the end of the year is weeks away, taxpayers who meet the prescribed income guidelines would potentially no longer be eligible for any additional payments. However, with current efforts underway, that could all change within the next sixty days.
Under the new rules of the Build Back Better Plan by President Biden, if successful, would extend the upfront payments into the next tax year. The payments would not only continue uninterrupted but may also make a wider range of taxpayers eligible for the monthly payments upfront.
As it currently stands, taxpayers with dependents who are under 6 years of age can receive up to $300 per month per child with an additional $250 per child up to age 17. Traditionally, these credits phased out at $2,000 per child and weren't eligible for anyone 17 years of age or older.
This would be extended throughout 2022 in its entirety with a few caveats attached:
Additional IRS Oversight
- All financial information considered when estimating income eligibility
- Adjustments would occur automatically
- Overpayments can be required if deemed necessary (based on phaseout thresholds)
Variable Income Phaseouts
- Modified AGI can be based on current year or upcoming years income
- Income above $150,000 is automatically disqualified for (jointly) married filers
- Single filers who make more than $75,000 are deemed ineligible
- Anyone with the head of household designation ineligible starting at $112,500
Payments Will Become Fully Refundable
- Tax obligations would not be reduced by the filing of the Child Tax Credit
The Status Quo Would Remain Permanent
- Payment refundability would remain so as long as individual tax situations allow
Taxpayers who are interested in assessing eligibility for one or all of the payments on the Child Tax Credit can report their income statuses via the IRS website immediately. Providing your information now can help you gain money, determine overpayment amounts, or qualify you for further years.