(WTNH) — It’s mid-July, which means monthly payments from this year’s child tax credit are going to be hitting millions of bank accounts if they haven’t already. We are stretching your dollar with what parents need to know about this money.
Money.com has some reminders for parents to make the best decision for their family.
1. You don’t need any income to qualify. The American Rescue Plan removed the minimum earnings floor as a requirement for receiving the child tax credit. Families with extremely low or no income are eligible for monthly payments.
2. You may want to “opt-out” if you’re an independent contractor or freelance worker. The payments are basically an advance on your future tax refund. So if you typically owe taxes every year, then you’re only getting money you’ll ultimately have to pay back.
3. You can’t update changes to your family until September. That’s important to remember if you’ve had a new child.
It’s important you know these payments could have a major impact on your tax refund next year, so you should talk to your tax preparer about how to best handle these payments.
Money also said the deadline for opting out of the July 15 payment already passed, but you can unenroll for the rest. As for the money you receive in July, you can put it into a separate account and save it for tax time.