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How to claim your Child Tax Credit money

Posted at 4:49 PM, Jul 14, 2021
and last updated 2021-07-15 05:50:40-04

RICHMOND, Va. -- When emotions run high in the Ramonet-Carey household, four-year-old Mateo Ramonet turns to his sensory box to calm him.

Ramonet's mom Elise Carey said the pandemic was tough for the family. They lost income because her husband had to stop working his second job at a restaurant.

"For a while, they had to close," Carey said. "It was strictly just window service."

The family is looking forward to receiving a check from the government as part of the Enhanced Child Tax Credit starting July 15.

"It's going to go toward student debt, we had to pause Sallie Mae for a year," Carey said. "And we will also use this to pay for preschool."

How do I qualify?

You should automatically get the full payments if the following statements are true:

  • You claimed the standard child tax credit on your tax returns in 2019 or 2020
  • Have kids under the age of 18
  • And make less than $75,000 as a single filer or $150,000 as a joint filer

Payments are reduced by $50 for every $1,000 over those income limits.

You won't get the enhanced benefit if:

  • You make $95,000 or more as a single filer, or $170,000 or more as a joint filer

How much money should I expect?

The expanded Child Tax Credit gives families $3,000 for each child between the ages of 6 and 17, and $3,600 for each child age five and under.

So, for example, if your family has three kids ages four, seven, and 10, you would receive a total of $9,600.

Financial adviser Cory Nichols with Yes Life Financial said he expected most families would spend the money right away on childcare or their regular budget.

"If you're below that threshold you're probably more likely, doesn't mean all the time, to live paycheck to paycheck, and that's why these payments are so instrumental," Nichols said.

When will I get paid?

Families will receive half of the money in a lump sum when they file their 2022 tax returns.

The other comes in advance payments that start on July 15.

Families can expect to receive between $250 and $300 per child each month until the end of this year.

Is there a catch?

Nichols said some families may want to opt-out of the enhancement if they made less than $170,000 as a joint filer, or $95,000 as a single filer when they filed their 2020 taxes, but make more than that now.

"If your income is now above that $170,000 threshold you now are not eligible for the enhancement, which means you're potentially going to owe it back," Nichols said.

Children who are under the age of 18 by December 31, 2021 qualify under the enhanced tax credit, including babies born in 2021.

If you have a baby born in 2021, you won't receive the enhancement until you file your 2022 tax return.