Tens of millions of Americans will be getting one more check from the IRS for 2021 next week, courtesy of the COVID-19 relief bill. And for a few of them, it could be one of the biggest payments of the year from the federal government.
The advance monthly child tax credit will go out for the final time this year on Wednesday. Under the American Rescue Plan passed by Congress in March 2021, the child tax credit was increased to $3,600 for children age 5 and under and $3,000 for those ages 6-17 and it was to be made available in monthly installments. The money was also made fully refundable.
Most eligible parents will get $300 for each qualifying child up to age 5 and $250 for children ages 6-17 on Wednesday. Due to an overpayment in September, some parents will get a slightly smaller check.
Income thresholds were set at $75,000 for individual tax filers, $112,500 for head of household and $150,000 for married couples filing jointly. Most of those people were automatically enrolled and had the chance to opt out. But a few million, particularly those with incomes so low that they don't have to file tax returns, had to register for the payments.
That last group had a deadline to sign up by Nov. 15. For those who signed up at the last minute and had not received any previous monthly child tax credit payments, the IRS said they could get the entire amount they are owed in Wednesday's payment.
"If you made those changes by the end of October, perhaps you got two payments -- November and December," said Raphael Tulino, IRS spokesman. "Or you'll get one in just December of that full (half-year) amount."
That's potentially $1,800 for each child up to age 5 or $1,500 for kids age 6-17 for those who signed up for the first time in early November.
Most of the child tax credit payments will go out via direct deposit and will show up Wednesday, but some checks will be mailed and may take a few days to arrive.
While half the child tax credit money went out in monthly installments, the rest will come after taxes are filed next year. For those parents of lower incomes who didn't sign up in time and for everyone else who opted out of all the payments, they can get the full $3,000 - $3,600 per child next year.
It's still not clear if the monthly child tax credit will continue in 2022. It's part of the Build Back Better bill that passed the House but is still being negotiated in the Senate.