Stimulus Update: 36 Million Families to Receive IRS Letters About Upcoming Deposits
Will you get a letter from the IRS about an upcoming deposit into your bank account?
When the American Rescue Plan Act passed, the $1,400 stimulus checks authorized by the legislation were the big news. But for many parents, the act also contained another important provision that will put more money in their bank accounts. It expanded the Child Tax Credit and changed the rules so parents would receive money in monthly deposits this year instead of having to wait to claim the credit when filing their taxes.
Now, the first of those deposits for the expanded credit will be hitting the bank accounts of millions of families very soon. And the IRS is working to let people know of the impending payment. In fact, on June 7, the agency announced that letters would go out to around 36 million families who could potentially qualify for payments valued at up to $3,600 per child.
Here's what you need to know about the IRS letter you'll likely get in the mail -- as well as the money that could be coming to you.
Here's what the IRS says about upcoming payments
According to the IRS, the letters being mailed to families are designed to alert people they could be eligible for an upcoming payment. Receiving a letter does not guarantee that money will come.
The full payment should be available to families with dependent children if their adjusted gross incomes equal $75,000 or less for single tax filers; $112,500 for heads of household; and $150,000 or less for married joint filers. After these income thresholds, the amount of the credit is reduced by $50 for each extra $1,000 in income.
The expanded tax credit is worth a total of $3,600 per child under the age of 6 and $3,000 per child between 6 and 17. As the IRS explains in the letter, payments will be distributed at a rate of $300 per month for families with kids under 6 and $250 per month for those with older children. The payments will be made on:
- July 15
- August 13
- September 15
- October 15
- November 15
- December 15
The IRS will be basing the payment amount on information provided in each taxpayer's 2020 tax return, or will base it on 2019 tax returns if information from the 2020 return isn't yet available. Most payments will be sent via direct deposit or check. And families who are actually eligible for payments will receive a second personalized letter that lists an estimate of the amount they will receive each month.
Most people do not need to do anything to get their money. However, as the IRS also explained, those who haven't filed 2019 or 2020 returns should do so "as soon as possible" in order to make sure they receive the correct amount of the tax credit if they are eligible for it.
The IRS has also launched a dedicated online Advance Child Tax Credit 2021 page which will soon offer families the ability to determine eligibility; estimate their payment; opt out of the advance payments; check their payment status; and update their information.
When you receive the letter, you don't need to do anything -- but just be aware that this extra stimulus money is coming so you may need to file a tax return if you need to give the IRS your current info. And you should watch your bank account to make sure you get your deposit on July 15 -- provided you meet the eligibility requirements.
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