What to know before 1st child tax credit payment hits your account

HOUSTON, Texas -- In two weeks, parents will be eligible to get monthly payments as part of the extended child tax credit. The IRS released new information related to the child tax credit before millions are distributed in mid-July.

WHEN WILL THE FIRST PAYMENTS ARRIVE?

Earlier this year, Congress increased the amount of money parents receive for the child tax credit. Congress also created an advance on the payment, so parents don't have to wait until they file their taxes.

The IRS said the first payment will arrive on July 15. From then on, it'll arrive every 15th day of the month, except in August, when it'll arrive on the 13th.

HOW MUCH WILL YOU GET?

The amount of money depends on the age of your child, how many children you have, and what your taxable income was. The IRS is using 2019 and 2020 tax returns.

If you're single and made less than $75,000, you'll get the full amount. For married couples, if you make less than $150,000, you'll get the full amount.

For kids ages six to 17, parents will receive $250 a month until December. For kids under six, parents will receive $300 a month.

Parents will receive the rest of the money when they file their taxes. Previously, parents got up to $2,000 per child. This year, it's upwards of $3,600.

Use the calculator below to find out how much you may get as part of the new child tax credit. Your information will not be stored in any way.

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CAN YOU OPT-OUT OF THE MONTHLY PAYMENTS?

Right now, it's too late to opt-out of the July payment. However, you can unenroll by Aug. 2 for the rest of the payments.

In order to do so, you have to use the IRS' child tax credit portal. If you're unsure what to do, Ed Gardner, a certified public accountant, suggests you look at your previous taxes.

"In the past, if they've owed taxes, they probably don't want to get the advanced credit," Gardner explained. "If they're making a lot more money this year, that's something that they may not get the advanced payment because they might end up owing."

If you qualify and choose to opt-out of monthly payments, you'll get the lump sum when you file your 2021 taxes next year.

CAN YOU SWITCH TO DIRECT DEPOSIT?

If you receive a paper check in July, you can switch to direct deposit. The IRS said parents can use the child tax credit portal to make the switch.

The IRS urges parents to use direct deposit to avoid stolen or lost checks.

BEWARE OF SCAMMERS

The IRS is warning parents to be on the lookout for scammers. With millions of dollars being distributed, it's possible scammers will target parents.

Gardner said it's important to know the IRS will only contact you by mail.

"If you get an email. If you get a text. If you have someone calling you, especially wanting to get your social security number and your bank account information, do not give it to them," Gardner said.

If you need to update bank or other information, the IRS said only use its website, and no other links.


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