A new $1,400 direct payment and extended unemployment benefits were focal points in the $1.9 trillion COVID stimulus package that passed in March.
But the bill also contains relief for Americans with children — and some parents are wondering about how exactly it works.
The child tax credit, a part of the relief bill, could provide substantial financial assistance for families.
More than 9 out of 10 families will receive checks starting in summer 2021. Families who typically do not pay taxes will receive the total amount.
But what about special circumstances or families who share custody of their children? Here are a few things you need to know about the child tax credit, according to CNET.
Will parents who share joint custody of a child each get a payment?
Parents who are not married, but share joint custody of their children could receive a check for the same child if they alternate years declaring the child on their taxes.
However, only one parent can claim the credit per year, according to Elaine Maag, a principal research associate with the nonpartisan Tax Policy Center.
If parents incorrectly claim that child, they may have to repay for the payment in 2022.
How does the child tax credit expansion work?
Before the last COVID relief bill, families who were eligible could claim a tax credit for their children when they finished filing their taxes. By doing this, the credit would reduce the amount of money they needed to pay.
With the new bill, the credit is “fully refundable.” Families who qualify will receive the full amount even if they don’t owe income taxes. Families will receive half the payment this year through period payments starting as soon as July and the second half of the credit in 2022 when they file their 2021 taxes.
Who is eligible to get the child tax credit?
Under the current relief bill, the child tax credit is available to parents. It has been expanded to $3,600 for each child who is 5 and younger, and $3,000 for each child 16 and younger.
Discover more Tax Day 2021 content on Audacy
—Recently filed your 2020 taxes? You may be eligible for a federal 'plus-up' payment
How to stop procrastinating on your 2021 taxes
—IRS says face masks, hand sanitizer, and other PPE are tax-deductible expenses
—How has the pandemic impacted your taxes?
—IRS moves tax filing deadline to May 17
—Will my pandemic relief be taxed?
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