Getting Answers: impacts from child tax credit payment on your taxes | News
WEST SPRINGFIELD, MA (WGGB/WSHM) — The final payments went out Wednesday for families eligible for the expanded child tax credit under the Biden Administration’s American Rescue Plan. If you’ve been receiving these monthly checks, you should know how that will impact you at tax filing time.
“The idea behind the advanced child tax credit was Congress felt that people needed the money today in their pockets, so it’s great that they’re offering up a larger credit,” said Ray Maagero with Liberty Tax in West Springfield.
Maagero told Western Mass News many families in western Massachusetts have benefitted from the expanded child tax credit and on Wednesday, the sixth and, right now, last child tax check is expected to go out directing as much as $300 per month to families for each eligible child.
“You are automatically based on your 2020 return. Your automatically signed up for the advance payment unless you opted out,” Maagero explained.
Maagero explained that from July 2021 to December 2021, eligible families with children five years and younger received a credit of $3,600 and children ages 6 to 17 received a credit of $3,000 in the form of monthly payments.
The swift launch, and potentially quick end, to the bolstered child tax credit highlights the risks of enacting sweeping social policy changes in a politically divisive environment, without consensus to make the changes stick.
“This year, you can get half of that, each of those categories in form of advance child tax credit that was paid July through December of 2021…They get the other half when they file their tax return,” Maagero noted.
Those six months of direct payments helped families pay for basic needs such as food, rent, and car insurance, but will mean less money in potential tax refund money. Maagero said families who opted out of the monthly payments will still receive the full total amount when they file their taxes.
“We had customers call us and say ‘You know, I would like to opt out. How do I opt out because I like getting that big refund?’” Maagero added.
Maagero wants to remind people that there are income limits for the child tax credit and those numbers relate to certain incomes that are based on your filing status.
“My biggest advice is to make sure that you get the correct information on what you did receive when you filed your tax return. Otherwise, it’s going to get held up,” Maagero said.