Financial experts break down child tax credit payments
COLUMBUS, Miss. (WCBI)- You may notice an additional deposit in your bank account.
Starting this July, families are receiving a child tax credit.
This $1,800 federal tax advance will disburse over the next six months.
And those funds can help families with costly expenses.
More money in your pocket.
Here’s what folks should know if they chose to keep child tax payments flowing.
” You’re not going to get it in your tax return next year because you’ve already gotten it on a monthly check.”
Scott Ferguson with Financial Concepts breaks down how those funds will transfer over the next six months.
” For each child, you get a child tax credit of $3,600 for the year 2021. They’re going to send you $1,800. You’ll have an additional $1,800 in tax credit on your return next year. If you had a tax bill of $1,800 and a $1,800 tax credit, your tax bill is paid for, and you get $300. If you’re expecting to get $2,000 to $3,000 back and they’ve already sent you $1,800, you’re not getting that back,” said Ferguson.
While it may mean a smaller tax refund, monthly payments can help with expenses.
” It’s been hard, and with that coming in, it helps out a lot. It’s helpful to buy food, and with school coming around, we use it for school supplies and stuff like that,” said Emily Dorrah.
” The pandemic has been economically devastating for a lot of people, and especially if you have children. They are the most vulnerable,” said David Tuck.
” It can be a good boost for someone who was struggling. Childcare costs are expensive, and in a time of COVID-19, those costs only seem to go up. It can be a way to help cover those costs on a month-to-month basis,” said Ferguson.
Families may be over-qualified and owe money back.
So, how do you check your status?
Go to IRS-dot-gov., on the home screen, click child tax credit, and fill in your information.
But if you choose to keep the payments.
“Invest those dollars every month for the child. Get some growth for it, put it into a 529 account to be there when the child gets out of high school and wants to go to college or a career field and go to a career school. It can be dollars for them to get them started,” said Ferguson.
” Saving creates security for you,” said Tuck.
Families can cancel child tax credits any time of the month.
Funds go toward your 2021 tax return.