AMERICANS are set to pocket a tidy sum after collecting stimulus checks and taking advantage of a pair of expanded tax credits.
Those eligible to collect the third round of stimulus aid along with child and earned income tax credits and who earn a salary of $65,000 or less – will be able to pocket $3,450.
“The people you’d think need the help are going to get it,” Steve Wamhoff, director of federal tax policy for the Institute on Taxation and Economic Policy told CNBC.
This week the Internal Revenue Service (IRS) confirmed they moved 2.2 million Economic Impact Payments under the American Rescue Plan worth $400billion.
Both the stimulus checks and tax credits are all credited to President Joe Biden’s $1.9trillion American Rescue Plan Act that was signed into law in March.
Last week, the first batch of Child Tax Credit (CTC) payments – worth roughly $15billion – reached about 35 million of the 60 million qualified American families.
Around 86 percent were sent by direct deposit.
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The credits are worth $300 a month for every child under the age of six and $250 a month for every child aged six to 17.
Meanwhile, those claiming kids between the ages of 18 and 24 who are enrolled as full-time college students can seek out $500 credits for each.
The maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of $75,000 or less for singles, $112,500 or less for heads of household and $150,000 or less for married couples filing a joint return and qualified widows and widowers.
The next installment dates are: August 13, September 15, October 15, and November 15.
As far as credits for Earned Income Tax Credit (EITC), the greatest amount of aid is going to the bottom 20 percent of taxpayers.
The IRS defines the credit as intending to help “low to moderate-income workers and families get a tax break.”
The idea is that come tax season the credits will substantially offset whatever you may owe to the federal government and fatten your refund check.
A family earning up to $21,300 can collect a $2,210 stimulus check, secure a $1,060 CTC and $320 in earned income credits, according to data compiled by the Taxation foundation.
Meanwhile, those earning $65,000 up to $111,300, can expect a $2,910 stimulus check, a $620 CTC and $10 earned income.
Taxpayers who fall in an income bracket that is too high to qualify, the regular credit of $2,000 per child for CTC can be sought so long as the adjusted gross income falls below $200,000 (single filers) or $400,000 (joint filers), CNBC reported.
If the taxpayer isn’t raising kids, the maximum credit in 2021 they can collect is $1,502 – which is higher than the previous year of $543,the Tax Foundation confirmed.
That benefit will come once the individual or couple files their 2021 returns.
If you’re eligible for the payments, you’ll still get them even if they are delayed.
Families who filed tax returns in 2019 or 2020 will automatically get the advance child tax credits, as long as they meet the criteria above.
And then for those who didn’t file the agency confirmed it’s still paying out aid once they are able to garner some key information on their handy Non-Filer tool.
The IRS confirmed it doled out 1.3 million payments worth around $2.6 billion to “eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.”
These are people who may not have been required to file (and have not filed) a tax return for 2020 to file a simplified tax return.
The effort is primarily to not leave behind the “homeless, rural poor, and other historically under-served groups.”
Once the IRS has the proper information they can determine the person or family’s ability to secure Child Tax Credit payments their stimulus check as well as claim the 2020 Recovery Rebate Credit.
