in part:
The payment would be based on a parent’s 2019 or 2020 federal return, whichever is the most recent available to the IRS.
The higher child tax credit payments will go to the younger children. So, it’s $300 per month ($3,600 per year) for infants to age 5. For ages 6 to 17 it’s $250 ($3,000 per year), Watson explained.
Democrats want to give parents $250 a month. Here’s who qualifies.
The payments are slated to begin in July. The money paid out in advance — because the credit is for 2021 — will overall be half the amount parents are projected to be eligible to claim when they file their federal returns next year, according to Olson.
The credit phases out for individuals with adjusted gross income of more than $75,000, $112,500 for head of household, and couples with more than $150,000.
Your AGI is your gross income minus certain adjustments. If you aren’t sure of your AGI, you’ll find it on Line 11 on Form 1040 and 1040-SR for the 2020 tax year. It’s on Line 8b on your 2019 federal tax return.
Will there be changes to child and dependent care tax credit?
You may be able to claim the child and dependent care credit if you paid expenses for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively look for work, according to the IRS.
The tax credit for child and dependent care would increase for 2021 from a maximum of $1,050 for one child and $2,100 for two or more children to $4,000 and $8,000. The credit would also be fully refundable, which means you get a refund, even if it’s more than what you owe.
“The increase in the amount of the child and dependent care payments is significant, and making the credit refundable once again benefits those taxpayers who do not have a tax liability,” Olson said. “Refundability puts money in their hands.”
Overall, the windfall for parents could bring an estimated 40 percent of children in America out of poverty. This would be long overdue for our nation’s families, and at a time they need it the most.
http://www.washingtonpost.com/business/2021/03/09/stimulus-payments-parents-dependents/
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