Child Tax Credit: How Illinois Residents Could Qualify for Up to $3,600 in Credits

The Treasury Department said Monday that 39 million families across the U.S. are set to receive monthly child payments beginning on July 15

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Illinois residents are being urged to file their 2020 tax returns to ensure that they receive the full benefits of the expanded Child Tax Credit, a provision of the American Rescue Plan that will provide families with tax credits of up to $3,600 per child.

The Treasury Department said Monday that 39 million families across the U.S. are set to receive monthly child payments beginning on July 15.

The payments are part of President Joe Biden's $1.9 trillion coronavirus relief package, which expanded the child tax credit for one year and made it possible to pre-pay the benefits on a monthly basis. Nearly 88% of children are set to receive the benefits without their parents needing to take any additional action.

According to the IRS, a monthly advance credit of up to $300 will be paid for each child 5 years of age and younger. A $250 credit will be paid for each child between the ages of 6 and 17, according to the IRS.

Those seeking the advance tax credit are highly encouraged to file taxes for 2020. Tax returns from 2019 will be used if 2020 returns are not filed yet, according to the IRS.

The filing date for 2020 federal tax returns is Monday after it was extended by officials earlier this year.

U.S. Reps. Sean Casten, Lauren Underwood and Bill Foster released a video last week urging all Illinois families to file their taxes so that they would qualify for the full credit amount.

“This pandemic has forced millions of parents to choose between taking care of their children or paying the bills--and with women’s labor market participation currently where it was in 1989, the child tax credit will help ensure we don’t lose 30 years of progress,” said Casten. “The Child Tax Credit puts money into the pockets of hardworking parents sooner, to pay for childcare or put gas in the car so they can get  to work and build better lives for their families. The best way to make sure you and your family receive monthly payments as soon as possible is to file a 2020 tax return before May 17.”

Eligibility for the expanded child tax credit is based on a taxpayer’s Adjusted Gross Income, the amount of income reported after deductions are made on tax returns.

The breakdown on income is as follows:

Single Filer – Phase out begins with an AGI above $75,000

Head of Household – Phase-out begins with an AGI of $112,500

Couple Filing Jointly – Phase-out begins at an AGI above $150,000

Filers will receive a max credit of $3,600 for each child age 5 or younger, according to the IRS. For children between the ages of 6 and 17, the max credit will be $3,000.

If parents have income above the phase out limits, the max value of the credit is reduced by $50 for every $1,000 in income above the AGI limit.

Families will receive half of the estimated maximum credit this year, and will receive the remainder of the credit when they file their 2021 tax returns, according to the IRS.

In order for parents or guardians to be eligible for the tax credits, children must have a valid Social Security Number, live with residents for at least half of the year, and be under the age of 18 as of Dec. 31, 2021. Parents or guardians must also claim the children as dependents on their tax returns.

Children are eligible if they are residents’ children, adopted children, stepchildren, half-siblings, foster children, grandchildren, nieces or nephews, or certain other relatives, provided that they are claimed as dependents on tax returns.

NBC Chicago/Associated Press
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