NASHVILLE, Tenn. (WTVF) — The latest round of monthly child tax credit payments is scheduled to be distributed to tens of millions of families today.
It could be the next-to-last one unless Congress acts.
More than $15 billion was sent to families of roughly 61 million children last month, according to the Treasury Department and Internal Revenue Service. Eligible households have received a total of more than $61 billion since the first monthly payment in July.
Most parents automatically get the enhanced credit of up to $300 for each child up to age 6 and $250 for each one ages 6 through 17. The IRS is scheduled to send the final payment next month.
The agency also recently added a feature to its child tax credit portal that allows parents to update their estimated income for this year.
This is important because the monthly installments have been based on 2020 or 2019 earnings, and those making more in 2021 may be receiving larger payments than they are entitled to.
As a result, they could get smaller refunds or even owe taxes when they complete their 2021 returns.
Also, low-income parents who have not submitted tax returns in the past two years and who didn't use the IRS tool to claim their coronavirus stimulus checks have until Monday to access the non-filer portal to sign up for monthly child tax credit payments.
Those who miss the deadline can still claim the credit of up to $3,600 per child if they file a 2021 tax return next year.
The enhanced child tax credit, which was created as part of the $1.9 trillion coronavirus relief package in March, is in effect only for 2021. It is key to the Biden's administration's effort to reduce child poverty.
It could be extended through 2022 under the sweeping $1.9 trillion budget reconciliation package that congressional Democrats are currently negotiating.
However, only heads of household earning up to $112,500 and joint filers making up to $150,000 annually would receive the funds in monthly installments next year, under the latest iteration of the bill.
Eligible parents with higher incomes would have to claim the credit on their tax return the following year.
The credit would be made permanently refundable so the lowest income families would continue to receive it.
The full enhanced credit is available for heads of households earning up to $112,500 a year and joint filers making up to $150,000, after which it begins to phase out.
For many families, the credit then plateaus at $2,000 per child and starts to phase out for single parents earning more than $200,000 or for married couples with incomes above $400,000.