Tax Day has been moved to May 17 this year. When parents file their federal taxes, they'll be eligible to receive prepayments for the 2021 American Rescue Act Funds under a new child tax credit.
When filing their 2020 federal taxes on May 17, parents must recognize the government will use that filing to establish the family's eligibility to receive an economic impact payment from the 2021 American Rescue Act.
Under the policy, families will receive between $3,000 for each child age six to 18 and $3,600 per child under six years old.
Families who file their 2020 taxes would receive the first check in July rather than waiting to claim a Recovery Rebate Credit on a 2021 tax return filed in 2022.
Early Childhood Alliance Executive Director Kristen Schulz explained how the payments under the American Rescue Act funds would work.
“It will come out as ... monthly periodic monthly payments between July and December for half of the amount that you're owed,” she said. “And then the other half, you'll get, you know, just as a lump sum when you file your taxes in next spring for 2021."
Anyone can file taxes with a social security number or with an Individual Tax Identification Number. It's a 2021 tax credit, but the federal government will start cutting checks in July. They'll go to parents who filed their taxes claiming their children as a tax credit.
"So, in order to get the child tax credit, it's only going to people who filed taxes,” Schulz said. “But unlike a lot of the other benefits, if the child has a social security number, the payment will go to the person who filed the taxes, even if they use an ITIN."