We don't know all the details yet. All of us will have to wait until IRS has provided additional information regarding the increase in the child tax credit and payments they said in the Act that will start in July.
Here is the information we have so far.
IRS is still adapting the Internal Revenue Tax Code by the changes passed by the American Rescue Plan. After they ate their tax code, they will need to update their software and then notify the tax software developers how they are to change their software.
IRS has not yet provided all details of how the new American Rescue Act will be paid out, so we will have to wait for additional information from IRS.
Here is what IRS is currently saying:
IRS Statement - American Rescue Plan Act of 2021
March 12, 2021
The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov.
The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.
The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable.
For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return.
For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance.
For additional information, refer to this link:
IRS Statement regarding American Rescue Act
You can also refer to the following link for Get my Payment:
IRS Get My Payment
Expanded Child Tax Credit
Starting in tax year 2021, the Plan increases the Child Tax Credit from $2,000 to:
- $3,600 for each child under 6
- $3,000 for each child age 6–17
It also makes the credit fully refundable, meaning you’ll be eligible to get it even if you don’t owe taxes.
Starting in July, payments for the Credit will be sent in advance so you won’t have to wait to file your 2021 taxes to receive that amount.
You don’t have to do anything to get these payments. The IRS will likely determine eligibility based on your most recent tax filing.
