With the first child tax credit money going out in a week, if you share custody of your child, should you and the child's other parent each expect ain 2021 and 2022?
The IRS is following specific rules for parents who share custody of a child -- including who's. For example, as a parent, you could receive for each , and are eligible. Also, parents who pay little to no will get the full amount they qualify for, whereas in the past, lower-income families were excluded.
There are alsoand limits on the money you get based on your . As a parent, you should also know that you could get . And, if you haven't yet received your recent stimulus payment, you might want to know and how to . Plus, here are the states offering . Now, to answer those questions.
In a shared-custody situation, can both parents get the monthly payment?
With the, parents who weren't married but shared joint custody of a child if they had been alternating years claiming the child on their taxes. With the most recent stimulus package, Congress closed off that loophole for the third stimulus checks.
Can parents who share custody of a child take advantage of a similar loophole with the new temporary Elaine Maag, a principal research associate with the nonpartisan Tax Policy Center. Only one parent can claim the credit for a given child, Maag told us. And if you incorrectly claim a child this year, you may have to repay all or part of the payment next year.? No, said
The requirement to repay any child tax credit overpayment is a departure from how the stimulus checks were handled. Typically, if you received an overpayment, you didn't need to send it back. (Here are situations where you'd need to.)
Can the child tax credit money be used to pay overdue 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 being 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, CRS said, similar to how claimed as a could be .
How will the child tax credit work?
Before the changes this year with the, eligible families could claim a tax credit for their 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.
This year, 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 in 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.
What are the eligibility requirements for the new child tax credit?
The American Rescue Plan temporarily expands the child tax credit 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. If you've got dependents between the ages of 18 and 24 who are enrolled in college full-time, you can receive $500 each for them, too.
There are. If your is $75,000 or less, single taxpayer parents will qualify for the full child tax credit amount, but that amount changes with incomes greater than $75,000.
The temporary expansion also makes the credit available to families in all US territories. Previously, the refundable credit was available to families in the US states, Guam, the Virgin Islands, the Northern Mariana Islands and Puerto Rico.
How much money can each family get in total?
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 money you might be owed, here's how to, how to and what we currently know about a possible .