PEORIA, Ill. (WMBD) — Many parents around the country may have noticed some extra cash in their bank accounts Thursday.
It’s the first of six monthly Child Tax Credit payments as part of President Joe Biden’s American Rescue Plan. The ARP expanded the benefits to include 17-year-olds.
For every child under the age of 6, families will get up to $3,600 under the expansion, or $300 per month. For every child ages 6-17, the amount is $3,000, or $250 per month.
Previously, the credit was $2,000 per child up to age 16.
Individuals making between $75,000-$95,000, and joint filers making between $150,000-$170,000 will see their payments reduced by $50 for every $1,000 of income. Those making above those amounts are not eligible for the tax credits.
Think of it as an advance on next year’s tax return. You can opt to receive the money in a lump sum next year too.
Bill Sharpe, president of Total Income Tax in Peoria, said if you don’t need the money right now, it’s a better idea to opt for the lump sum.
“Frankly, if they don’t need it right now, I don’t have them take it right now,” he said. “If they’re having tough times, and they need the money, and they are late on their bills, etc. I would recommend those folks take the advance, but also remind them, in the same breath, that they can’t take the advance and anticipate the same or larger refund.”
Experts say the expansion of tax credit benefits will cut poverty in half. According to the IRS, 36 million households are eligible.
If you are unsure if you are eligible, the IRS has an Eligibility Assistant available.