January 10, 2023
This week there have been a few news articles discussing the child tax credit that starts very soon. Many parents still don’t understand what it is and how it can benefit them so I want to answer some of the questions parents may have. What Is The Child Tax Credit: The child tax credit is […]
Child Tax Credit
This week there have been a few news articles discussing the child tax credit that starts very soon. Many parents still don’t understand what it is and how it can benefit them so I want to answer some of the questions parents may have.
What Is The Child Tax Credit:
The child tax credit is not new, but what is new is that it is being expanded just for 2021 thanks to the last stimulus bill. If you are a parent of a child 0 to 17 years old then you will receive money. If your child is six years old or younger your tax credit will be $3600 and if your child is older than six years old you will receive $3000. The payments start in July then end in December and you will only get half of the credit advanced to you and the rest in 2021 tax filings.
How Do I Qualify:
The qualifications are based on your income. If you make $75,000 and under as a single person then you will qualify. If you are married filing jointly your income has to be $150,000 or less and head of household $112,000. If your income is above those numbers the credit will be reduced until phased out. The IRS would like you to have your 2020 taxes done, but can go off your 2019 taxes if needed.
What Should I Do With The Money:
Over the last year there has been a lot of help for the American people coming down for Washington and this is another example. This help is specifically for children and should be treated as such. Each month that parents receive $250 or $300 that money should be used to help the child. That help could be in the form of putting more food on the table if needed or buying clothes for next school year. If you are strong financially right now the money can be used for their future. Open a college savings account or an investment account to help start their wealth building journey.
This will be the only year that this extra money will be available so make sure to make the best of it!
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