Housing ReliefWere you one of the many who lost their job once the coronavirus caused so many business closures? If so, you’re certainly not alone, as the pandemic has negatively impacted families’ finances all over the world.
In the U.S., we got a bit of help from a few stimulus payments, eviction moratoriums, beefed-up unemployment benefits, and the like, but if you have a whole family to feed, that still may not be enough. The federal government knew families were still struggling to stay afloat, which is why they decided to announce advance child tax credit payments. Here is everything you need to know about these bank account boosters to help pay child support for several months.
Why the Advance Child Tax Credit Payments Were Created
The federal government just created a website dedicated to the new and improved child tax credit. On its homepage, you get a great glimpse into what these advance payments are all about: “Putting cash in your family’s pocket every month for the things you need, even if you make little or no money.”
As you can see, you could qualify even if you don’t make money, which is great news during the pandemic when so many are unemployed. As for the specifics on these payments, here we go:
How Much You Can Get of the help paying child support
As you can expect just by looking at its name, the more kids you have, the more your child tax credit payments could be worth.
If you have children under 6, you can receive as much as $300 per child every month. And if your kids are between 6 and 17 years old, you can still receive as much as $250 per child every month.
Child Tax Credit Eligibility
To qualify for those maximum monthly amounts, your income will need to fall into one of these categories:
- Joint filers – Make less than $150,000.
- Single filers – Make less than $75,000.
- Single head of households – Make less than $112,500.
Does your income fit into one of those categories? Then you should look forward to getting the max amount per child.
Your income is just one part of the equation. Your children make up the other part, and you should be eligible if each child fits the following:
- Valid Social Security number
- At the end of 2020, was younger than 17.
- During 2021, they didn’t provide over half of their support.
- For over half of 2021, they lived with you.
As for what fits the definition of a “child,” it’s any of these:
- Son
- Daughter
- Adopted child
- Foster child
- Stepchild
- Grandchild
- Younger sibling
- Half-sibling
- Step-sibling
Here are some tips for making the best use of your advance child tax credit payments:
- Organize an emergency budget: Unexpected events can happen with your children, so having a savings pocket is important to handle any financial emergencies.
- Plan for the future: Consider looking at your emergency fund, settling high-interest debts, and holding cash for upcoming expenses over the next 12 months.
- Increase your health savings: Parents can make unexpected trips to the doctor with children, so keeping a portion of the child tax credit for future medical expenses is essential.
- Use the budget to find additional sources of income to reduce basic expenses.
By following these tips, you can make the best use of your advance child tax credit payments, manage your finances more effectively, and ensure you have the resources to handle any unexpected situations that may arise.
When to Expect Advance Child Tax Credit Payments
The IRS started sending payments automatically via mail or direct deposit on July 15, 2021. They will continue to do so for the next 6 months around the 15th of each month.
What’s needed to receive payments? Filing taxes for 2019 or 2020 or using the IRS-Non-filer Portal in 2020 to receive stimulus payments.
If you’re confused about where your payments are or how to start getting help paying child support, go here.
