Next month, Americans can start getting thousands of dollars child tax credits as a result of federal COVID recovery legislation.
Advance child tax credits are early payments from the IRS.
They’ll go out monthly beginning July 15, and a larger payment will come in December.
Doug Gross, a partner at MBE CPAs in Wausau, explains how much people could get.
"There's basically thresholds, so depending on the size of your income and the size of your family will determine how much credit you may or may not qualify for,” says Gross.
For married couples making $150,000 or less with kids younger than 4 years old, it's $3,600 per qualifying child. For kids ages 6 through 17, it’s $3,000 per child.
The IRS will send out these advance payments automatically through monthly payments, unless people opt out and choose to take the credit as part of next spring’s taxes.
If you decide to get paid this year, you'll need to be careful.
"The danger of taking the credit ahead of time is if your income were to go up and now you don't qualify, you would have to pay that credit back next spring when you file. There will be a reconciliation that will happen when you file your tax return where you'll need to report what you have received throughout the next 6 months,” Gross says.
