DETROIT – If you have children under the age of 17, you might want to check your bank balance Thursday night -- there may be a little extra cash in there as part of the American Rescue Plan.
The federal government estimates the parents of about 2 million children will pick up just under $500 million between now and the end of the 2021.
It’s important to point out that all the government is doing is expanding the existing child tax credit, and if you take the money now, you won’t be getting it in the fashion you may have received it in the past.
The expanded tax credit is a tax break. Instead of a child under the age of six qualifying for a $2,000 credit -- like last year -- it becomes $3,600.
For children between six and 17, the break goes from $2,000 to $3,000.
Previously, the IRS capped the age at 16, but year’s end.
The average check size is $333 per qualifying child. Residents will be receiving the money on the 15th of the month until December.
However, residents should know they are receiving half of their 2021 child tax credit as cash. You’ll receive the remainder when you file your 2021 taxes.
There are income limits to qualify -- $75,000 for single filers, $112,00 for heads of households and $150,000 for joint filers. Above $150,000, the tax break phases out to zero.
In order to qualify, residents will have had to filed a 2019 or 2020 tax return and claimed the child tax credit. If you don’t earn enough to have to file a tax return, but you contacted the IRS to receive economic impact payments, you still qualify.
Additionally, you need to have been a U.S. resident for more than six months.
However, you may not want to take the money. A tax credit goes to the bottom line, meaning you’re getting part of, or all of what could be your tax refund early.
If you count on a large refund in the spring, you may not get it. Depending on changing family circumstances, you might have to pay some, or all of the money.
Residents can opt out on the IRS’ official website here.
You can go on the IRS website to see if you qualify and what is needed to receive the money.