Reed: Enhanced Child Tax Credit Payments Begin Reaching RI Families on July 15
WASHINGTON, DC – Thanks to a new federal law, thousands of Rhode Islanders will soon see their bank accounts grow.
In an effort to help cover the costs of raising kids and boost awareness about federal efforts to reduce youth poverty, U.S. Senator Jack Reed announced that starting July 15, tens of thousands of parents across Rhode Island will begin receiving income from the new, enhanced child tax credit that was included in the American Rescue Plan Act for 2021.
Eligible parents with kids under age six will get a monthly $300 lump sum payment each month per child through the end of the year. Parents with kids ages 6 to 17 will receive $250 each month per child. The Internal Revenue Service (IRS) will issue the payments during the middle of every month, from July 15 to December 15. Families will receive the remainder of their credit at tax time next year, in 2022.
A strong supporter of this historic tax relief for working families, Senator Reed helped pass the American Rescue Plan Act, which President Biden signed into law in March.
“I’m pleased we were able to work with President Biden to put more money directly into the pockets of hardworking parents to help pay for food, child care, and other essentials. This money will help a lot of families make ends meet. I strongly support a fairer tax code that benefits working families and not just big corporations and the wealthy few,” said Senator Reed. “The American Rescue Plan Act was an historic investment in the economic well-being of children, families, and workers and I want to ensure every eligible taxpayer gets their fair share.”
According to the Center on Budget and Policy Priorities, approximately 185,000 Rhode Island children and their families will benefit from the new law, resulting in as much as $551 million in CTC funds flowing to Rhode Island in 2021. That is almost double the amount Rhode Island families would have received ($280 million) under prior law.
Nationwide, an estimated 39 million households – covering about 88 percent of children across the country -- will benefit according to data from the IRS).
For 2021, the maximum credit is $3,600 for children younger than age 6 and $3,000 for those between 6 and 17. The law expands CTC to cover children aged 17 for the first time and makes the credit fully refundable in 2021. The full credit is available to married couples with children who file taxes jointly and have adjusted gross income of no more than $150,000, or $75,000 for individuals. The enhanced child tax credit phases out for taxpayers with earnings above these thresholds, but taxpayers making $200,000 or less, or $400,000 for married couples will still be eligible for the regular child tax credit, which is $2,000 per child. The regular credit phases out for taxpayers making more than these thresholds. However, all eligible taxpayers with children aged 17 will benefit from the temporary age expansion.
Senator Reed is urging parents who need more information to visit: www.IRS.gov/childtaxcredit2021
Filers who have not yet filed a 2020 tax return must do so or submit their information using IRS’ Non-Filers tool to receive the monthly payments. This IRS website also contains important facts and information and serves as a portal for parents to update information about changes to income, address, bank account, filing status, and the number of qualifying children. It also offers households who prefer to receive 2021 Child Tax Credits in one lump sum at tax time a chance to opt-out of receiving the monthly payments and claim their payment at tax time instead.
Senator Reed is working with U.S. Senators Sherrod Brown (D-OH), Michael Bennet (D-CO), and others to permanently expand the enhanced child tax credit to reward hard work and lift more children out of poverty.