TaxWatch: What’s your youngster tax credit score? The IRS is about to ship you a letter explaining how a lot you can get

Here is a letter from the Internal Revenue Service that you might actually want to receive.

About a month before its first child extended tax credit payouts, the IRS announced on Monday that it would be sending out millions of letters informing families of the money that is in store for them.

The first set of letters informs the recipients that they may be eligible for the payments. The IRS said it has already started sending these letters to approximately 36 million families.

The second set of letters tells recipients how much money they will receive each month as part of the increased tax credit.

An Eligible Household is entitled to a monthly payment of $ 300 for each child under the age of 6. Households with children 6-17 years of age are eligible for a payment of US $ 250 per child.

Payments should start on July 15th and run through December, in the middle of each month. (The IRS said it issues payments on the 15th of every month except August when the money is spent on the 13th. August 15th is a Sunday.)

The increased payouts are part of the US $ 1.9 trillion bailout plan passed in March.

Lawmakers increased the maximum payout for one year from $ 2,000 to $ 3,600 for children under the age of 6. They also increased the payouts for children over that age to $ 3,000.

The pending payments are prepayments for half of these sums.

Full per child payments under the top-up loans go to single parents with modified gross adjusted income less than $ 75,000, $ 150,000 for married couples filing together, and $ 112,500 for head of household.

The Treasury Department estimates the payments will reach 88% of American households, raising approximately 65.25 million children.

If a family wants the money in a lump sum instead of in increments, they have the option to decline the monthly agreement via an online portal.

The portal has yet to be launched, but the IRS said more information will be available in the coming weeks. Another upcoming web portal will allow taxpayers to report important events such as a new child to the IRS.

IRS Commissioner Charles Rettig previously said the agency needed a tax return to know how much each payment should be and where to send it.

"The IRS urges individuals and families who have not yet submitted their returns for 2020 or 2019 to do so as soon as possible so that they can receive all of the prepayments they are entitled to," the agency said Monday.

Tax day came and went on May 17th, although 2020 returns can be filed with an extension until October 15th.

However, there is no penalty for non-filing for taxpayers who owe no taxes and they have a three-year window to file and apply for the refund, according to the IRS.

IRS previously said that after three years, the rules prevent sending a refund check – "and applying credits".

Related Articles