Many American families are having a hard time with money, which is why there are a lot of programs to help. These include the $1,400 payment for each person and the increased Child Tax Credit (CTC) of up to $3,600 per child. As part of the American Rescue Plan, these programs are meant to help eligible families get money.
This article goes into a lot of information about these payments, including who is eligible, when they are made, and how families can get the most out of them.
Overview of the American Rescue Plan
The American Rescue Plan, which was passed into law in 2021, made big changes to the Child Tax Credit and gave people and families direct stimulus funds.
The goal of this plan is to ease people’s worries about money, speed up the healing of the economy, and help families meet their basic needs. These are the two main parts of this plan that are being talked about here:
- $1,400 Per Person Payment: Also known as Economic Impact Payments, these are direct payments made to eligible individuals to help cover immediate expenses.
- Child Tax Credit (CTC): A refundable tax credit designed to assist families with the cost of raising children, significantly increased for the 2021 tax year.
Changes in the Child Tax Credit for 2024
The Child Tax Credit was first set at $2,000 per child, with $1,400 being refunded. As part of the American Rescue Plan, it was temporarily increased in 2021. These are the most important changes:
- Increased Amount: The CTC was increased to $3,600 for children under six years old and $3,000 for children aged six to seventeen.
- Full Refundability: For 2021, the credit was made fully refundable, allowing families to receive the full amount regardless of their tax liability.
- Expansion of Age Limit: The age limit for qualifying children was extended to include seventeen-year-olds.
With the Tax Relief for American Families and Workers Act, the CTC will be adjusted for inflation starting in 2024. The highest refundable amount will rise to $1,900 in 2024 and $2,000 in 2025.
Eligibility for the $1,400 and $3,600 Payments
Several things determine who can get these payments, such as income limits and the make-up of the family. Here’s how it works:
Eligibility for the $1,400 Payment
- Income Limits: Single filers earning up to $75,000, joint filers earning up to $150,000, and heads of households earning up to $112,500 are eligible for the full payment. Payments phase out beyond these limits.
- Dependents: Eligible individuals receive $1,400 for each dependent, including children and qualifying relatives.
Eligibility for the Child Tax Credit
- Income Limits: Similar to the $1,400 payment, the full CTC is available to single filers earning up to $75,000, joint filers earning up to $150,000, and heads of households earning up to $112,500.
- Qualifying Children: Children must have a valid Social Security Number, be under 18 at the end of the tax year, and live with the taxpayer for more than half the year.
- Citizenship Requirements: The child must be a U.S. citizen, national, or resident alien.
Payment Distribution and Claim Process
Payment Schedule
These payments are sent out on a set plan to make sure that eligible families get help on time. Here is a table that shows when payments are due:
| Payment Type | Distribution Period |
|---|---|
| $1,400 Per Person | Monthly distributions from July 2024 |
| Child Tax Credit | Monthly distributions from July 2024 |
Summary of CTC and $1,400 Payment Eligibility and Amounts
| Criteria | CTC Amount | $1,400 Payment Eligibility |
|---|---|---|
| Child Age Limit | Under 17 years | N/A |
| Income Limit (Single) | N/A | Less than $75,000 |
| Income Limit (Joint Filers) | N/A | Up to $150,000 |
| Income Limit (Head of Household) | N/A | No more than $112,500 |
| Residency Requirement | Over half the year | N/A |
| Social Security Number | Required | N/A |
Claim Process
To claim the Child Tax Credit, families need to:
- File a Tax Return: Submit a federal tax return using Form 1040, including Schedule 8812, to calculate and claim the CTC.
- Automatic Payments: Families who filed taxes in 2019 or 2020, or received Economic Impact Payments, will automatically receive monthly CTC payments.
Also See:- Maximizing GIS Benefits in 2024
Impact on Federal Benefits
It’s important to note that getting the CTC doesn’t change other government benefits, like Medicaid or unemployment insurance. Families can get more than one type of help without losing any of their advantages.
Maximizing Benefits
Families can maximize their benefits by:
- Staying Informed: Regularly checking IRS updates and announcements regarding tax credits and relief measures.
- Ensuring Accuracy: Providing accurate information on tax returns to avoid delays or issues with payments.
- Seeking Professional Advice: Consulting with tax professionals for guidance on optimizing tax benefits and understanding eligibility criteria.
Conclusion
The increased Child Tax Credit and the $1,400 payment for each person are important parts of the American Rescue Plan that help families across the country with their finances.
Families can get the help they need to handle their household finances during hard times by knowing the eligibility requirements, payment schedules, and claim process for these benefits.