Little one tax credit score and shared youngster custody: Is every dad or mum eligible for a similar child?

Child tax credit and shared child custody: Is each parent eligible for the same kid?

The brand new guidelines across the youngster tax credit score decide who does — and would not — get the cash.


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This yr’s youngster tax credit score will ship households who meet the necessities (and there are estimated to be almost 49 million of them) a major enhance of their family finances over the subsequent 12 months, with periodic funds beginning within the second half of 2021. 

The new guidelines surrounding the kid tax credit score imply that households with youngsters beneath age 18 may obtain funds beginning this summer time. Equally essential, households who pay little or no federal tax will obtain the total quantity they qualify for, a change from how the CTC had labored previously, the place lower-income households had been excluded from your entire quantity they had been due.

So how is the brand new CTC completely different, who’s eligible for a fee, and might dad and mom who share joint custody of a kid every get cash this yr? We now have solutions beneath. Plus, here is extra on the third stimulus examine, who qualifies for that fee and what to know concerning the amended tax kind.

May dad and mom who share joint custody of a kid every get a fee?

With the first two stimulus checks, dad and mom who aren’t married however share joint custody of a kid may every obtain a fee for a similar youngster in the event that they alternate years claiming the kid on their taxes. With the brand new invoice, Congress labored to shut off that loophole for the third stimulus checks being despatched out now. 

Can dad and mom who share custody of a kid reap the benefits of an identical loophole with the brand new non permanent tax credit score? No, mentioned Elaine Maag, a principal analysis affiliate with the nonpartisan Tax Coverage Heart. Just one individual can declare the credit score for a given youngster, Maag instructed us. And for those who incorrectly declare a toddler this yr, you could have to repay all or a part of the fee subsequent yr.

Repaying any CTC overpayment is a departure from how the stimulus checks had been dealt with. Usually, for those who obtained an overpayment, you need not ship it again. (Listed below are conditions the place you’d have to return a stimulus examine fee to the IRS.)


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Can CTC payments be garnished to cover past-due child support?

According to the Congressional Research Service — Congress’ public policy research institute — the new law exempts the periodic child tax credit payments going out this year from offset for past-due child support. However, the amount you claim as a credit on your 2021 tax returns in 2022 could be subject to offset, the Congressional service said, similar to how stimulus payments claimed as a Recovery Rebate Credit could be redirected to cover an overdue debt.

How does the new child tax credit expansion work?

Before the changes this year with the American Rescue Plan, eligible families could claim a tax credit for their qualified children when they filed their taxes. The credit would reduce the amount of taxes they owed. That payment rule, however, excluded lower-income families who didn’t owe federal taxes and wouldn’t benefit from a tax saving with the credit. 

With the new law, the credit is “fully refundable,” so qualifying families will receive the full dollar amount even if they don’t owe income taxes. Families will receive half the credit this year through period payments starting as soon as July and the second half of the credit in 2022 when they file their 2021 taxes during next year’s tax season. If, instead, you’d rather get one check, the IRS will let you choose to receive the full payment next year when you file. Here are more details on how the child tax credit payments will work.

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More than 9 out of 10 families with children will qualify for the expanded child tax credit.


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Who qualifies for the expanded child tax credit? 

The American Rescue Plan temporarily expands the CTC from $2,000 per child 16 years old and younger to $3,600 for children age 5 and younger and to $3,000 for children age 17 and younger. 

The temporary expansion also makes the credit available to families in all US territories. Previously, the refundable credit was available to families in Guam, the Virgin Islands, the Northern Mariana Islands and Puerto Rico.


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How much can families receive in 2021 and 2022?

Over 90% of all families with children — from lowest to highest qualifying incomes — will receive an average benefit of $4,380, according to the Tax Policy Center. Half the amount will go out this year periodically, starting this summer in roughly equivalent payments, and the second half next year when you file your taxes.

For more information on other funding, here’s how to estimate your third stimulus check, how to track your payment and what we know about a possible fourth stimulus check so far.

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