Starting July 15, cash from the federal government with no spending restrictions will be popping up in bank accounts as Americans shore up their finances in the pandemic.It’s the start of advance payments under the expanded Child Tax Credit .
Federal lawmakers made these changes when passing the $1.9 trillion American Rescue Plan, a bill that also authorized $1,400 stimulus checks. “ The qualifying minor does not have to be the person’s child, but must be claimed as a dependent, and have lived in your household for more than half of the year. ”
But there are also important differences people need to remember now and at tax time, financial advisers told MarketWatch. To receive the Child Tax Credit, there must be a ‘qualifying minor’ in the house The IRS cut stimulus checks for all eligible children in a household, but it also cut checks to people without qualifying dependents.
The child has to live in the household for more than a half of the year and be properly claimed as a dependent, the IRS said. The Child Tax Credit is based on ‘real-time’ eligibility The IRS determined stimulus-check amounts based on one snapshot in time: a household’s tax return. A lot can happen in a year, but if a family had child after filing a tax return, the IRS didn’t have an immediate way to learn about the new dependent and quickly issue another payment.
During future updates at some point in the summer and fall, people will be able to use the portal to update family status and income changes, the IRS said.
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