Parents, take note!
Starting in the middle of July, many American families will receive six monthly payments of up to $300 per month for each child under 6 and $250 per month for each child ages 6-17. (Note that these credits start to phase out for individual taxpayers who earn over $75,000 and those who are married and filing jointly who earn more than $150,000.). (You can use a calculator here to find out how much your family might get.)
This is great news, of course! It will ease the financial burden and help families get back on their feet as we (hopefully) come out of the pandemic.
But what happens when a child’s parents are divorced and they live in two households? Divorced parents should pay special attention!
The checks will go to the parent who claimed the credit on their 2020 taxes. For families that have agreed to alternate taking the credit, this might require some cooperation and negotiation to prevent one parent from getting the credit for 2 years in a row.
You can find out more about the expanded Child Tax Credit from the IRS website here.