As part of the American Rescue plan, the US government has passed the COVID relief bill of $1.9 trillion.  Government official says that these payments will be credited to eligible residents by direct deposit or via mail in the form of the debit card or check.

Your eligibility is determined based on your 2020 tax returns. If you have not filed an IT return for the 2020 year, then 2019 returns will be referred. It means the federal government will fetch income information from the most recent filed IT return to establish eligibility.

Most taxpayers do not need to take any action; they will get money similar to previous stimulus payments. If your direct debit information is missing, then you should do it using the IRS portal.

 

How much can you get?

You will get the full $1400 for each individual.

  • If you earned $75,000 or less in your recent tax year,
  • If you file an IT return as a married couple and earned $150,000 or less,
  • If you are head of household and earned $112,500 or less.

You will get reduced payment each.

  • If you earned more than $75,000 but less than $80,000 in your recent tax year,
  • If you file IT return as a married couple and earned more than $150,000 but less than $160,000.
  • You are head of household and earned more than $112,500 but less than $120,000.

 

Money for Dependents:

Based on the dependent declared on the recent tax return, parents will also receive $1400 each. Here dependent is not restricted to children under age 17. All qualifying dependents include college students, people with disabilities, parents, and grandparents, will be eligible. The important thing to note is that this money will not go directly to the dependent’s account. It will go to the person who claims them as a dependent.

 

Child Tax Credit (CTC) for 2021

The government has decided to give more tax credits to families having kids for the year 2021 only. Families will get a child tax credit based on the age of the kids. This tax credit will apply to the children; who are, living with you for at least six months and related to you. Higher-income families may get a lesser tax credit.

  • Families having kids under age six will receive up to $3,600 per child. Kids who are going to born in 2021 year will also be eligible. You need to update the IRS portal once new born baby arrives.
  • Families with children above age six years and below 17 years will receive a credit of $3,000 per child.
  • Families with older kids can claim $500 for each child aged 18 years
  • Families with older children aged between 19years and 24 years can claim $500 each if they are attending college full time.

 

You can check your payment status on the IRS official website. These stimulus payments and the tax credit are going to help people in this COVID-19 pandemic.