IRS sends letters to 36 million eligible households
Uwe Krejci | DigitalVision | Getty Images
The IRS announced Monday that it has begun mailing letters to more than 36 million American families who may be eligible for the extended child tax credit and monthly payments due to begin in July.
The maximum extended credit set by the American Rescue Plan in March is $ 3,600 for children under 6 and $ 3,000 for children 6-17 years old for 2021.
Half of the money is sent to most families in monthly installments from July 15 through December – payments are $ 300 per month for children under 6 and $ 250 per month for children 6-17 years old. The families will receive the rest when they file their taxes for 2021 next year.
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Letters from the IRS are sent to families who may be eligible based on information they submitted to the agency on their 2020 or 2019 federal income tax returns, if it has not been submitted for the last year. The tax authority is also sending letters to those who have used the Nonfilers tool to request a 2020 economic impact payment and may also be eligible for the extended child tax credit.
Families eligible for the credit and up to date on their tax returns do not need to take any action to receive monthly July payments. Those who have not yet filed an application for 2019 or 2020 should ensure that they submit their tax information to the IRS so that the agency can determine eligibility and send any payments they are entitled to.
Most families – about 80% according to the IRS – will receive the money by direct deposit like previous stimulus payments. Others are given either paper checks or a debit card. In the coming months, the IRS will continue to provide child tax credit tools and resources, including a way for families to opt out of monthly payments and receive the credit in a lump sum when they file tax in 2021.