It is almost time to stop receiving stimulus payments for the year 2021. Most people received $1,400 in direct payments earlier this year. According to Fox Baltimore, the expanded federal Child Tax Credit is still providing money to families with children. Some families may receive unexpected payments this month.
The Enhanced Child Tax Credit
The American Rescue Plan Act of 2021 was passed in order to assist the country in its recovery from the devastation caused by COVID-19. The nearly $2 trillion economic rescue package is the most expensive in the history of the United States. The Act was signed into law by President Joe Biden in March, and it has since distributed millions of dollars to citizens across the country.
With the passage of the American Rescue Plan by Congress in March, the Child Tax Credit was raised to $3,600 for children under the age of 6 and $3,000 for those aged 6 to 17. According to Newsweek, Children under the age of six and all other eligible children will now receive monthly payments totaling $300 instead of one-time payments. Bank accounts will receive half the total credit amount from July through December 2021. The final payment will be delivered to the most eligible parents this month.
The Plus-Up Payments
Based on their 2019 tax return, some people received stimulus payments from the federal government. However, people’s situations may have changed. In the event of a job change or the loss of a job, one’s income may decline. It’s possible that some families have a child. The IRS will know the change when they file their 2020 tax returns. The payments will be made to compensate for the difference between what they received in 2019 and what they are owed for 2020. The IRS refers to these payments as “Plus-up” payments.
Within two weeks of submitting a tax return for 2020, the IRS typically processes the plus-up payments. If you haven’t received your third stimulus payment yet, you can track it using the IRS tool. If your bank account isn’t on file or hasn’t passed the IRS’s validity test, the plus-up payments are being sent either by direct deposit to a bank account or by paper check to a direct mailing address as per Forbes.
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