The US Internal Revenue Service and the Treasury Department on Wednesday announced that over tens of millions of families have received the first payment of the expanded child tax credit. The families will be receiving extra funds each month till the end of 2021, with an added tax break in 2022. 

This comes under the Democrats’ $1.9 trillion stimulus package signed into law by President Joe Biden March. The first instalment of the payment rounded up to $15 billion. While this might reduce child poverty to half and benefit low-income families, the extra funds will boost financially stable American families even more. 

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Eligibility for the expanded child tax credit

Heads of the family will receive the full enhanced credit, along with joint filers earning up to $150,000 a year. However, this will later begin to phase out.

The credit will be capped at $2,000 per child for many families and will eventually phase out for single parents making over $200,000 or for married couples earning over $400,000.

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As per the protocol, the relief package makes the child tax credit fully refundable, thus, becoming more accessible for low-income households. Furthermore, children of parents, who aren’t citizens of the US, can avail the benefit as long as they have social security numbers . Parents also are eligible to avail the child credit tax for their kids if they have Individual Taxpayer Identification Numbers (ITIN). 

How much credit can be availed?

This depends on the family size and household income. Eligible households can avail up to $3,600 per child under 6 years of age and upto $3,000 for each between the age of 6 and 17 in 2021. The payment will be credited on the 15th of each month – unless weekend or holiday – till the end of 2021. To know whether the parents are enrolled for advance payment, they can check an IRS portal. 

The portal can even be used to avail the credit in lump sum instead of on a monthly basis, if need be. 

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What to do to get the credit?

If the parents haven’t filed tax returns or used the non-filer tool, they can register through a different IRS portal in order to receive the credit.

 The IRS is set to offer parents the feature to update their mailing address in August 2021. The agency will later allow them to update the number of dependents, and the marital and income status in the late summer.