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Tax Credits Coming to Qualified Families

With Tennessee opting out of Federal unemployment supplement program, ending on July 3, some new help will be coming to some families around the same time. The Child Tax Credit program has been increased this year, giving some families some extra money to get through the pandemic recovery.

Payments for the 2021 Child Tax Credit will be made regularly from July through December this year, with families getting monthly payments of up to $300 for each child under six years old, and up to $250 for each child six to 17 years old. Because the advance payments are beginning halfway through the year, families will get the second half as tax refunds.

According to the IRS, taxpayers who do not wish to receive an advance payment of the 2021 Child Tax Credit will have the opportunity to opt out of advance payments. Families will be able to update information about changes in their income, filing status, or the number of qualifying children. 

The IRS will use your latest tax filing to determine the appropriate amount of the Child Tax Credit, with payments made through direct deposit, check or debit card. 

For this year only, the child tax credit has increased from $2,000 per child to $3,000 per child. Parents of children under age six would be eligible for an even larger $3,600 total credit. The plan also includes $3,000 benefits to the parents of 17-year-olds who meet plan qualifications. Previously children had to be 16 or younger.

The full expanded benefit is available to all children 17 and under in families with 2020 adjusted gross income of less than $75,000 for single parents and $150,000 for a married couple filing jointly, and ends for individuals earning $95,000 and married couples filing jointly making $170,000, though they’d still be eligible for the regular child tax credit.

The child tax credit increase was part of the American Rescue Plan, signed into law by President Joe Biden in March. There are no limits on how families can spend the money, giving a lot of flexibility for people to decide how the extra cash can best help their family during the COVID recovery.