Child Tax Credit Takes Effect

 

The Child Tax Credit payments have begun going out to families.

The payments come as a result of the 1.9 trillion cares signed into law by President Joe Biden.

The full credit in the form of monthly payments is available for heads of households earning $112,500 and joint filers up to $150,000 a year, before decreasing with larger incomes.

While families may be receiving as much as 2,000 dollars per child, with lower-income families able to receive more aid as the credits are tax refundable, tax experts want families to know those monthly payments are deducted from a family’s annual tax returns.

Experts warn that filers should be aware they can choose the expanded monthly payments, or the larger sum upon refund, but not both.

Philip Cheung with CG Accounting Group in Ocean City believes that the payments will help families, but wants those who choose to receive them to understand the choice they are making.

“The child tax credit is geared towards an advance payment of a refund you would normally get when you file in the winter- your ability to get access to that credit more immediately now starting [Thursday],” he said. 

Cheung says there is a chance that families who the credit and expect a large tax refund, may end up owing money to the IRS.

He says that those who are wondering if they are eligible and want the most accurate information when filing should update their IRS profile on the government website, especially when filing for children born in 2021.

“The IRS is looking at those past returns for 2018, 2019 just like with the CARES payments, and so if you had a child in 2021 that won’t be something in those previous filings so people should go to the IRS website and add that information and probably speak to a tax professional as well,” Cheung said.

 

 

 

 

 

 

Categories: Delaware, Local News, Maryland, Virginia