This week, dollars are being deposited into the bank accounts of families across the country, including New Jersey. This influx of federal funds given directly to parents is predicted to cut child poverty in the Garden State by nearly one-third.
To qualify, parents must have a child 17 or younger listed as deductions on their taxes. The child’s age is determined by how old they are by the end of the 2021 calendar year. Full credit, up to $3,000 per child for children between the ages of six and 17, and $3,600 per child under the age of six, will be allocated to single filers who earn up to $112,500, or joint filers making up to $150,000 a year. Payments decrease for those making more, phasing out for those earning more than $200,000 as a single-payer or $400,000 as a couple. Payments are part of the American Rescue Plan.
There are no work requirements, and those without a permanent home may still claim the credits.
Families with children under the age of six will receive up to $300 per month from now through December. For each child between the ages of six and 17, parents will receive $250 per month. The Internal Revenue Services will deposit these funds into the bank account or mail checks out, using information from their 2020 tax information or their stimulus check. The other half of the funds will be received after filing their tax return next year.
These funds do not impact any other public benefits like SNAP that the family may receive and will not be considered taxable income when the parents file their tax return next year.
Individuals who have not filed a tax return because their income is below the amount of reportable income and who have not applied for the stimulus checks have to register with the IRS to receive the child tax credit at www.childtaxcredit.gov.
Lauren is a teacher and a hard-working single mom with three kids ages seven, ten, and 12. Last year, she made $55,000, as reported on her taxes. Due to the expanded child tax credit under the American Rescue Plan, Lauren will receive $750 per month, or $250 per child over the age of six, totaling $4,500 by December. When Lauren files her taxes next April, she will receive another $4,500 in her tax return.