Next month, 88 percent of families with kids 17 and under will start to see some extra cash. It’s part of the American Rescue Plan Act of 2021.
Qualifying families will get $3,600 per child up to age five and $3,000 for kids six to 17. Half of that money will start to come in the form of monthly checks on July 15.
“If you have one child that’s four years old, you will get a $300 a month payment beginning July 15 every month until December 15,” said Carlisle area wealth advisor Jim DeGaetano. “If you have three kids that are under the age of five, you’re getting $900 a month.”
DeGaetano says you will receive the money the same way you received other stimulus payments, likely through a check or direct deposit.
You don’t need to sign up for these funds; the government will know who is eligible based on your last tax return.
The other half of the money will then come as a credit on your 2021 tax return.
“These are non-refundable,” DeGaetano said. “So in other words, you qualify for the money, you’re not paying it back…this is a credit.”
There are some restrictions to this money, depending on your income.
“If you are married filing jointly and you make up to $150,000 a year, you qualify,” DeGaetano said. “There is a phase out up to $170,000, so if you make over $170,000 adjusted gross income a year, you’re out. You don’t get this. If you’re single it’s $75,000 a year or less and if you’re Head of Household, it’s $112,500 per year.”
DeGaetano says families can defer those monthly payments until their 2021 tax return, but he doesn’t see any real benefit in doing that. Instead, he suggests you just be smart with it.
“If you do happen to have some credit cards that are high interest bearing, pay them off,” he said “You have a wonderful opportunity with these monies to rectify some bad debt or any other issues you may have.”
Click here for more information from the IRS.
Click here to find a calculator that will help you determine exactly how much money your family should expect.