The grand experiment towards Universal Income for All begins this week. The Child Tax Credit is set to begin with direct deposits going out July 15th to most all American households with children. Make good use of this new found money! But don't get used to it. As of now this is only for the next 6 months, legislation will need to be passed to extend it to future years. 

• $300/month/child = $3,600 Child Tax Credit for children ages 5 and under at the end of 2021
• $250/month/child = $3,000 Child Tax Credit for children ages 6 through 17 at the end of 2021
• $167/month/child = $2,000 Child Tax Credit if your AGI income exceeds the phase out range
  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower; 
  • $112,500 if filing as head of household;
  • $75,000 if you are a single filer or are married and filing a separate return
• $0/month/child = The Child Tax Credit reduces to $0 after $400,000 married, $200,000 if Single or Head of Household.
  • Both phaseouts reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

Like all tax code changes recently, we will reconcile this when we prepare your tax return next year. In January 2022, the IRS will send you Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021. Please keep this letter regarding your advance Child Tax Credit payments with your tax records. 

Here is the IRS link for more info or to change your bank info:
https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

Contact your Savings Coach if you need help deciphering this, need to adjust your budget, or want to jump start your investing. 

Coach Funk