Economy

Here’s who will get $1,000 in stimulus money before the end of the year

In this April 23, 2020, photo, President Donald Trump’s name is seen on a stimulus check issued by the IRS to help combat the adverse economic effects of the COVID-19 outbreak, in San Antonio. (AP Photo/Eric Gay)

BALTIMORE (WBFF) — There’s a lot more stimulus money coming for some families before the end of the year. The American Rescue Plan sent direct payments of $1,400 to most Americans – that was after Congress approved two other payments. Unemployment payments were expended — most recently, by $300. It also put money in peoples’ pockets with a series of changes to tax credits.

One of the changes in the American Rescue Plan was the expansion of the federal child tax credit. The government is paying the first half of this credit in advance until the end of the year. The first two payments have already gone out.

Here’s how we arrive at the $1,000 figure. There are four more payments left in the expanded child tax credit – September 15, October 15, November 15, and December 15. The minimum amount of money that a family would receive if they have a child 17 or younger is $250.

So, $250 x 4 payments = $1,000.

And that’s the bare minimum if your family qualifies. This tax credit applies per child. Also, the amount of money goes up if you have younger children.

The payments only begin to phase out if you earn a certain amount of money.

According to the IRS, the Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:

  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
  • $112,500 if filing as head of household; or
  • $75,000 if you are a single filer or are married and filing a separate return.

The first phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

What’s more, this is just the first half of the tax credit. The second half will come as a lump sum when you file your taxes in 2022.

According to the IRS, these payments are not taxable.

Written by WBFF Staff

Categories: Economy

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