Money could hit your bank account Friday and you don't have to do anything. In fact, this will be the fourth time it's happened in 2020, and you have your kids to thank.
Don't you love it when you log into your bank account and the balance is higher than you thought it was going to be? It will happen again on Friday, October 15th.
The IRS has been dropping deposits into your account on the 15th of every month since July, and they're going to keep it up until December. Congress increased the Child Tax Credit to $3600 for 2021, and they're giving eligible parents half of it during the year, and they'll fund the other half when we file our tax returns in 2022. Depending on your filing status and the child's age, you're most likely getting $250 or $300 for each child each month. If your income is over a certain level the amount is prorated. Kids under 5 years old create the maximum benefit if the parents' household income is under certain limits.
It's great to have the deposits now, but will the Advanced Child Tax Credit impact our tax situation so we'll owe more on our returns next year? The short answer is no, according to accountants. The credit itself is not taxable but an accountant did tell KTVB that it's possible that parents could owe some of it back when they file their tax returns next spring if the credit turns out to be greater than the amount they're eligible for after the numbers are all in.
You can unenroll in the Advanced Child Tax Credit if you want, and that will stop the payments and could lead to a bigger refund in 2022. The option to unenroll is on IRS.gov, and both parents have to do it.
A recent Kids Count report said the number of kids in Idaho has grown 42 percent since 1990, and there are almost half a million kids here now. If all of them are tied to the credit, that's between $110 and $135 million that will flow into Idaho on Friday. (450,000 kids times $250 or $300). Stores and restaurants should be excited.
If you're getting the maximum amount and you have, let's say, three kids, you're getting $900 per month. Yay, you. Will you spend the money on the kids this weekend because they're tied to the credit? Hmm.
Maybe we'll just put it toward all the groceries and back rent they owe us. Right after we go out for ice cream.