As part of President Joe Biden’s $1.9 trillion coronavirus relief package, eligible families can receive as much as $3,600 for each child under the age of 6. This represents an 89% increase over 2019’s amount. For children between ages 6 and 17, the credit is now $3,000. Previously children age 17 were not included in the Child Tax Credit at all.
Additionally, Congress has asked the IRS to sent part of this increased credit to taxpayers monthly beginning July of 2021. Some media outlets have called this a 4th stimulus. Beware that these payments are VERY different than the earlier 3 stimulus payments.
For most people, we recommend opting out of the payments via the IRS website: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal . Unfortunately the IRS did not give us much advance notice of the opt-out procedure. We’ve personally gone through the process and it worked. However, we’ve heard stories of others having difficulty. Don’t expect the process to be speedy. When you start, make sure you have your cell phone, your patience, and your tech savvy friend/spouse.
Finally, note this is all temporary. The increased tax credit AND these payments are set to revert back to their old ways for 2022 unless Congress acts. We understand extending these benefits is a high priority for the current administration.
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Don’t wreck your most valuable deduction
Uncle Sam's allowance for vehicle expenses is one of the least understood deductions. Of course car and truck expenses are allowable, but how are they maximized? What records are necessary to survive an audit?