Will You Receive a Letter from the IRS About the Child Tax Credit?

Are you eligible for monthly Child Tax Credit payments?  Well, the Internal Revenue Service (IRS) announced that it has started sending letters to more than 36 million American families who may be eligible for monthly Child Tax Credit payments starting in July.  

In this article, we are going to discuss the Child Tax Credit, and we will cover the changes made to the credit authorized by the recently passed American Rescue Plan Act.  If, after reading this article, you would like to discuss the American Rescue Plan as it relates to your own tax situation, we invite you to call the Sarasota tax attorneys at the Law Office of Mary E. King, P.L.  

The Law Office of Mary E. King, P.L. can make sure that your tax issues are resolved efficiently and at the lowest cost to you.  Please fill out our online contact form , or call us at 941-906-7585 today.

The Child Tax Credit is a tax credit that American taxpayers receive for every qualifying dependent child.  The purpose of the credit is to help taxpayers support their families by deducting a certain amount from their tax liability for each child who can be considered a dependent.  The credit is designed to decrease a taxpayer’s tax burden on a dollar-for-dollar basis.

There are two requirements that need to be met in order to claim the Child Tax Credit.  First, the taxpayer receiving the credit must be a “qualifying taxpayer.”  Second, the dependent child must meet certain qualifications.

A “qualifying taxpayer” is someone who provided more than half of their financial support during the tax year to children, stepchildren, and other family members such as siblings, grandchildren, nieces, and nephews.  

In order to qualify as a “dependent,” the child must be a U.S. citizen or lawful permanent resident, must have lived with the taxpayer claiming the credit for more than half of the tax year, and must meet age, dependency, and residency requirements.

As you may know, the tax credit is intended to help low- to middle-income taxpayers, and it is phased out for high-income families.

In March of this year, President Biden signed the American Rescue Plan Act of 2021 into law.  The Rescue Plan greatly expanded the Child Tax Credit.  In fact, it is estimated that the changes to the Child Tax Credit under the Rescue Plan will reduce the number of U.S. children living in poverty by 45 percent .

The Rescue Plan increases the maximum amount of the annual credit from $2,000 per child under age 17, to $3,000 per child under age 18, or $3,600 for any child under age 6.  Also, the credit was partially refundable in 2020, but the 2021 credit is fully refundable.

Note, however, that the expansion of the tax credit will only be for 2021 under the Rescue Plan.  If there is no subsequent legislation extending the new credit benefits, then the Child Tax Credit will go back to the 2020 amounts and rules in the tax year 2022.

In an effort to help taxpayers who may be eligible for the Child Tax Credit but may not be aware that they are, the IRS is now sending out personalized letters to families who may be eligible based on the information in their 2019 and 2020 tax returns.  Further, those eligible families will receive a second personalized letter from the IRS showing an estimate of their monthly Child Tax Credit payment, which will begin on July 15.

If you are eligible, then you do not need to worry about having to fill out more paperwork to get the credit.  The IRS states that most families who are eligible do not need to take any further action to get their payment.  The IRS will typically calculate the payment amount from the taxpayers’ 2020 or 2019 tax returns.  

Payments will be either by direct deposit or check.  The payment will be up to $300 per month for each qualifying child under age 6, and up to $250 per month for each qualifying child ages 6 to 17.  The Child Tax Credit payments will be sent (or direct deposited) in the middle of each month, through December.   

We invite you to reach out to the Law Offices of Mary E. King.  Tax matters can be complicated, and thus, it is always helpful to have someone in your corner who understands the tax law and deals with the IRS on a regular basis.  Indeed, beyond just the stimulus payment from the IRS, there could be other issues with which a seasoned tax attorney can help.  

So, when it comes to dealing with tax relief and tax litigation, you need to talk to Sarasota tax attorneys who can help.  Mary E. King has spent her career concentrating on tax law and can help you with tax scams in Florida and elsewhere.  Attorney King has a wealth of information about what types of options would make the most sense for you and your business.

That helps explain why she’s received an A+ rating from the Florida Better Business Bureau. If you have a tax-related issue – no matter how small or how large – setting up an initial consultation with Mary E. King, tax lawyer of Florida, is the first step you should take towards relief.

The Law Office of Mary King P.L. offers complete IRS problem-solving services including all areas from tax debt settlement to planning the most efficient tax strategy for individuals and businesses.  Call us today to schedule an initial consultation.  With years of experience as a tax lawyer in Sarasota for many clients, Attorney Mary E. King can make sure that your tax issues are resolved in your favor.  Fill out our online contact form , or call us at 941-906-7585.   Remember, at the Law Office of Mary E. King, we are focused on solving your tax issues for good.

The information in this blog post is provided for informational purposes only and is not intended to be legal advice. You should not make a decision whether or not to contact an attorney based upon the information in this blog post. No attorney-client relationship is formed nor should any such relationship be implied. If you require legal advice, please consult with an attorney licensed to practice in your jurisdiction.

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