Little one tax credit and shared baby custody: Are each dad and mom eligible for a similar child?
The new child tax credit rules determine who gets the money and who doesn’t.
Sarah Tew / CNET
With the temporary expansion of the child tax credit, families who qualify (and there are nearly 49 million of them) can look for a significant financial boost to their household budget over the next 12 months.
Themean families with For will . Families who pay little or nothing are just as important receive the full amount they qualify for, a change from the way the CTC worked in the past where lower-income families were excluded from the total amount due.
How is the new CTC different?and can parents who share joint custody of a child each receive money this year? We have answers below. Plus, here’s more on that , and .
Do parents who share custody of a child each receive a payment?
With the, Parents who are not married but share joint custody of a child if they take turns claiming the child on their taxes. With the new bill, Congress worked to fill this gap for the third stimulus checks that are now being sent out.
Can parents who share custody of a child exploit a similar loophole with the new temporary tax credit? No, said Elaine Maag, a senior research fellow at the impartial Tax Policy Center. Only one person can claim the credit for a specific child, Maag said. And if you mistakenly claim a child this year, you may have to repay all or part of the payment next year.
The repayment of a CTC overpayment is a departure from the way the stimulus tests were conducted. If you’ve received an overpayment, there is usually no need to return it. (Here are situations you need to.)
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Child Tax Credit: How Much Do You Get?
Can CTC payments be garnished to pay overdue child support payments?
According to the Congressional Research Service – the Congressional public policy research institute – the new law exempts the regular child tax credits that ran this year from compensation for overdue child support payments. However, the amount that you claim as a credit for your 2021 tax return could be offset in 2022, according to the Congress Service, similar toclaimed as could be .
How does the new CTC extension work?
Prior to this year’s changes to the American Rescue Plan, eligible families were able to claim a tax credit for theirswhen they filed their taxes. The credit would reduce the amount of tax owed. However, this payment rule excluded lower-income families who did not owe federal taxes and who would not benefit from a tax saving on the loan.
With the new law, the credit is “fully refundable” so eligible families receive the full dollar amount even if they don’t owe any income tax. Families will get half of the loan through period payments starting in July this year and the second half of the loan in 2022 if they file their taxes for 2021 during next year’s tax season. If you’d rather receive a check instead, you can get full payment on filing with the IRS next year. Here you can find more details about.
More than 9 in 10 families with children are eligible for the Child Extended Tax Credit.
Sarah Tew / CNET
Who Is Eligible for the Child Tax Credit?
The American Rescue Plan temporarily expands the CTC from $ 2,000 per child under 16 to $ 3,600 for children under 5 and to $ 3,000 for children under 17.
The temporary extension also makes the loan available to families in all US territories. Previously, the Refundable Balance was available to families in Guam, the Virgin Islands, the Northern Mariana Islands, and Puerto Rico.
Look at that:
Your tax questions were answered in 3 minutes
How much can families receive in 2021 and 2022?
Over 90% of families with children – from the lowest to the highest skilled income – receive an average benefit of $ 4,380, according to the Tax Policy Center. Half of the amount will be spent on a regular basis this year, starting this summer with roughly equivalent payments, and the second half next year when you file your taxes.
You can find more information on other funding options here, how one and what we know about a possible one .