| Hi Taylor:
Child tax credit... what's the deal with it? Do I need to do anything,
how much is it, how does it all work? - Christina
Hi Christina: Great questions! People talked about this a lot
when the original stimulus bill was signed, and now the child tax
credit rollout is beginning so it's time to refresh on what exactly
credit. Just like the multiple stimulus checks Americans have
received, eligibility will depend on how much you make. Individuals
making less than $75,000 and couples making less than $150,000
a year can expect to see $300/month per child under six and $250/month
for each kid between 6-17. Households with higher earnings will
still get the previous $2,000 tax credit, but won't see the monthly
payment totaling the higher amount.
2. Effect on taxes. If you hear someone saying you'll have
to pay the money back, that's a misrepresentation. Previously,
parents would get a tax credit for their dependents. In this year's
stimulus-based model, the credit goes up and comes by way of monthly
checks/direct deposits. That means the money you might be used
to seeing on your tax return will have already hit your bank account.
It could also get a little sticky for people who jumped into a
new income bracket between 2020 and 2021. Nothing's ever neat
or easy when it comes to taxes, and these payments could present
a minor nuisance when you file in 2022. Still, the money is part
of the stimulus payment and shouldn't be viewed as any sort of
loan. It's yours.
3. Your obligation. If you filed your taxes, you probably
already have money in your bank account. If you didn't, you can
go to the IRS.gov site to apply and get the money you're owed.
If you don't like the tax part I mentioned above, you can join
the 1 million-plus people who have already opted out of the monthly
payment and just want to get this money as a credit when they
file taxes. That step can also be taken through the IRS website.
| Hope this answers
your questions. If you've already received your payment, I hope you
and your kids are able to put it to good use!
© Taylor Kovar
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