ELMIRA, N.Y. (WETM/NBC NEWS) — While child tax credits are not new, the latest payments are slightly different because of the American Rescue Plan. These differences have left some people with questions.
According to the Biden administration, these payments will “dramatically reduce child poverty”.
For the first time, the payments, normally given annually as tax refunds, will be distributed monthly. Because the advance payments are beginning halfway through the year, families will get the second half as tax refunds.
Around 80 percent of the families that qualify have direct deposit already set up and do not need to take any additional steps. The other 20 percent will get payments by check or debit card.
Dr. Martin Cantor, a consulting economist, detailed the monetary differences with these payments.
“You are now able to get half of that enhanced credit in the next six months,” said Dr. Cantor. “It’s also gone up from $2,000 to $3,600 if you have children under 6 and $3,000 for children between 6 and 17. What that means is starting July 15th, you [will] get $300 a month if you have a child under six and $250 a month if you have children between six and 17.”
Leslie Tayne, Esq., a debt relief attorney, said these payments are not something you have to sign up for.
“It would be automatic based on your tax returns from 2019 and 2020,” said Tayne. “You can opt out of it. So, if you don’t qualify, you should opt out and there is a deadline. That deadline for opting out is June 28.”
To check your eligibility or to unenroll, you can visit the IRS website.
U.S. Senator Kirsten Gillibrand (D-NY) held a video press conference on Jun. 23 and she explained how this child tax credit will benefit Americans and New Yorkers.
“Raising children in this country is expensive,” said Sen. Gillibrand. “We’ve seen additional strains and worries grow about getting basic resources into families. So, this is going to go a long way to helping families meet the needs of their children. Their healthcare needs, their education needs, and then just basically food, shelter and housing all of that matters deeply and I think this goes a very long way to meeting those needs.”
Dr. Cantor gave his perspective on the tax credit money.
“The fact of the matter is, childcare costs way more than $300 a month,” said Dr. Cantor. “It helps a little bit. It helps the people who are most vulnerable and have gotten hurt from this pandemic. Certainly, if you have a family income [over] $150,000, you will have a better opportunity to pay for your childcare. But, if you are at the lower levels and you need this to get back to work, this could be helpful.”
According to the IRS, the increased amounts are phased out for families with incomes over $150,000 for married taxpayers filing joint returns, along with qualifying widows or widowers; $112,500 for heads of households; and $75,000 for all other taxpayers.
Dr. Cantor also noted that if you have a newborn or are a non-filer with children, you should notify the IRS. You can sign up on the IRS’s website, using their sign-up tool.