Enhanced Child Tax Credit payments started going out across the country on Thursday, and Utahns stand to benefit more than other Americans — Utahns have, on average, more children than residents of any other state.
(According to a 2019 analysis by Statista, the average number of people in a Utah household was 3.08. Hawaii was second with 2.95; North Dakota was last with 2.28; the U.S. average was 2.61.)
If you’re eligible for the enhanced Child Tax Credit, you might receive your first payment on Thursday. According to the Internal Revenue Service, almost 90% of 36 million eligible families signed up for direct deposits — although there could be a lag of 2-3 business days before the deposit shows up. (That’s because of your bank, by the way.)
If you’re waiting for your payment to come in the mail, that could take up to 1-2 weeks.
President Joe Biden’s American Rescue Plan expanded the Child Tax Credit, which has been around for more than 20 years, boosting it from $2,000 to $3,600 for each child under the age of 6 and $3,000 for children ages 6-17. You don’t have to have paid federal income tax, but you do have to have filed with the IRS in 2019 or 2020 and claimed the Child Tax Credit — or registered with the IRS to get the payments.
(You can still do that here.)
If you gave the IRS a bank account number to receive a refund, the enhanced CTC payment will go to that account. Otherwise, it’ll come in the mail.
Basically, you’ll get the “expanded” part of the Child Tax Credit as monthly payments. You’ll have to file for the original, $2,000 CTC when you do your 2021 taxes.
What is the cutoff point? It’s $75,000 for single taxpayers and $150,000 for joint filers to receive the full payments. The payment is reduced $50 for every $1,000 you earn over that — so it’s gone completely at $95,000 for single taxpayers and $170,000 for joint filers.
If you exceed the limits, you can still get the regular, $2,000 CTC payment when you do your taxes — if you earn less than $200,000/$400,000.
When are the payments scheduled? July 15, Aug. 13, Sept. 15, Nov. 15, Dec. 15.
What if I have a child in 2021? The IRS is looking at 2020 returns for info about how many kids you have, so it won’t include children born or adopted in 2021. It’s working on a way to add them on its Child Tax Credit update portal — but that’s not working yet, so keep checking back.
Do I have to pay taxes on my CTC payments? No. They aren’t considered income. Just like the stimulus payments during the pandemic.
But keep a record of the payments, because you’ll need that when you file for the original Child Tax Credit. (You’ll get a letter from the IRS in early 2022.)
Will there be expanded CTC payments in 2022? That’s the $1,600 (or $1,000) per child question. The Biden administration and congressional Democrats want to extend it for five more years, but that hasn’t passed yet. And there’s opposition from many Republicans.