(WJW) — Eligible families will soon see payments on increased 2021 child tax credits after the passage of President Joe Biden’s $1.9 trillion relief package.
But there are several factors that affect how much families with children will receive, like the ages of the children and the annual income of their parents.
Grow by Acorns + CNBC offers a Child Tax Credit Calculator to help parents determine how much they could potentially get and when.
All the information needed is a filing status, adjusted gross income, the number of children being claimed and their ages.
Click below for an estimate:
Meanwhile, many Americans may not be aware of the changes and how to take advantage of the credits.
Here’s how it works:
Under previous law, most taxpayers could receive tax credits of up to $2,000 per child.
The new virus relief bill increases that tax break for 2021 to $3,000 for every child between the ages of 6 and 17 and to $3,600 for every child under the age of 6.
The expansion of the 2021 child tax credit, along with other measures in the rescue act such as impact payments of up to $1,400 for eligible family members, will cut childhood poverty in half this year, according to an analysis done by the Center on Poverty and Social Policy at Columbia University.
Several lawmakers, including Sen. Sherrod Brown (D-OH), are leading an effort to make the new child tax credits permanent.
Who is eligible?
Most parents can expect to get the credits. Fox Business reports the expanded amounts, however, begin to decrease for individuals with incomes of $75,000 and for married couples with incomes of $150,000.
If a family doesn’t qualify for the expanded child tax credit, they can still receive the $2,000 credit if the income level is below $200,000 for individuals and $400,000 for married couples.
How do parents get the credits?
The IRS will establish an online portal for taxpayers to update their relevant tax data to obtain the expanded child tax credits, such as notifying the government of the birth of a child in 2021. These updates will allow the IRS to make mid-year payment adjustments.
“In addition to this online tool, the Treasury Department and IRS will carry out a sweeping public awareness campaign … to reach all Americans who may be eligible for this financial assistance,” a Treasury fact sheet said in reference to the expanded child tax credits.
When will parents receive the credits?
According to an IRS fact sheet, individuals eligible for a 2021 child tax credit will receive advanced payments of the credit through periodic payments from July 1 to December 31, 2021.
In a press release dated March 25, Brown said families could get $250 to $300 per month per child.
The credits are fully refundable.
“This will make a big difference for families paying for daycare and diapers and school supplies and all the extra expenses that come up when you have children. And it would come at a time when families need all the support they can get,” he said.