Stimulus update: Parents who share joint custody of kids are eligible for child tax credit payments

PARENTS who share joint custody of their kids are eligible to get expanded child tax credits payments under President Biden's COVID-19 relief package.

Coming as part of the landmark $1.9 trillion America Rescue Plan, which was signed into law in March, the payments will begin in July and continue to be sent out monthly until December.

Every household with children that qualified for the latest $1,400 stimulus check is set to receive the child credit cash.

Such households include couples who earn less than $150,000 or an individual who earns less than $75,000.

Families with children under the age of six are eligible for up to $3,600 in payments per child.

Those with kids aged between six and 17, meanwhile, will be eligible for $3,000 in credit for each qualifying child.

Additionally, those with dependents between the ages of 18 and 24 who are enrolled in college full-time can receive $500 for each.

The temporary change to the credit provides families with up to $1,600 more per child than previously, helping to cover family expenses, clear debts and other costs.

In previous years, you could claim a credit of only as much as $2,000 per child, and just $1,400 was refundable.

One question the payments are sure to raise is whether or not parents with joint custody of a child are both eligible for a payment.

With the first two rounds of stimulus payments, parents sharing joint custody could receive a check for the same child if they alternate years claiming the child on their taxes.

However, under the America Rescue Plan, Congress sealed off that loophole.

The same loophole was also cut off when it comes to temporary tax credits, principal research associate at Tax Policy Center, Elaine Maag, told CNET.

Only one person can claim the credit for a given child, Maag said. And if a child is incorrectly claimed this year, it may result in the parent being forced to repay all or part of the payment next year.

Over 90 percent of all families with children – from lowest to highest qualifying incomes — will receive an average benefit of $4,380, according to the Tax Policy Center.

Half the amount will go out this year periodically, starting this summer in roughly equivalent payments, and the second half next year when taxes for 2021 are filed.'

For those who wish to opt-out of the monthly payment, they can, and instead claim the full amount when they file their taxes next year.

Meanwhile, the IRS is trying to return unclaimed income tax refunds worth more than $1.3billion to taxpayers who never got around to filing a federal return for 2017.

For those who have not received their stimulus checks and have not filed their federal returns since 2017, a collect tax refund worth more than 1.3 billion out there.

About 1.3million taxpayers who met the specific requirement will be happy to know that there is money available for them.

“We want to help people get these refunds, but they will need to quickly file a 2017 tax return,” IRS Commissioner Charles Rettig said.

Due to the pandemic, the April 17 deadline to claim tax refunds has been extended to May 17.

“Time is quickly running out for these taxpayers,” Rettig said. 

    Source: Read Full Article