Millions of recipients got the first installment of the child tax credit last week in their bank accounts. Is the amount you got per your expectations? What if the amount is less than your expectations? Similar to the calculators for the coronavirus stimulus check amount, there are calculators available to help you calculate the child tax credit (CTC) amount.
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Those who meet the eligibility requirements will get the child tax credit of up to $300 for kids below six years and up to $250 for each between ages 6 and 17. Moreover, for dependents aged 18 up through age 24, the recipients will get a one-time payment of $500 in 2022.
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Those with AGI of $75,000 or less (single filer), or $112,500 as a head of household, or $150,000 filing jointly, will be eligible for the full amount. The payment will phase out by $50 for every $1,000 of income over the threshold income.
The IRS uses your 2020 tax return to determine the amount of CTC. If the 2020 return isn’t available, then the IRS will use your 2019 tax return. However, a point to note is that this child tax credit is for 2021. This means that the amount you get may go down or increase if your family status changed in 2021.
The IRS will send half of the total amount that it determines, on the basis of your tax return, in the form of six monthly installments from July through December. And, the other half, you will get after you file your tax return next year.
So, it is a bit difficult to manually calculate the amount of the child tax credit you could get. You can, however, use the calculators available online to calculate the amount of child tax credit that you should expect.
How to use child tax credit calculators
Several calculators are available online, including from Kiplinger (a publisher of business forecasts and personal finance advice), H&R Block and Bankrate.
To use these calculators, you will have to enter the following details: filing status, AGI (adjusted gross income), and the number of kids. These calculators will not only tell the amount you could get as monthly installments, but also the amount you may get next year.
Though these calculators give a good estimate of the CTC amount you should expect, there are a few things that you need to know to help you understand the calculations better.
For instance, those with kids aging out of a payment bracket, the credit amount depends on the kids' age as of Dec. 31 of this year. Another point is that children born in 2021 will also be eligible for a tax credit of $3,600 per child. Also, those who are nonfilers, will be eligible for CTC. Such people need to use the "Non-filer Sign-up tool" to claim their child tax credit.