People have been asking the question as to whether they will be getting a fourth stimulus check from the IRS in July 2021 — and the answer is a definite “no” — at least at the moment. The problem is, people are asking the wrong question. What they should instead be inquiring is whether people will be getting an additional cash benefit in July. For many Americans, the answer to this question is “yes.”
Here’s how it’s all supposed to work.
This benefit will reach adults with minor children living at home in the form of monthly payments for each qualifying child during the months July through December (via GoBankingRates). The per child payment will be either $250 or $300 a month for each qualifying child, depending on the age of the child. The credit is $3,600 per child under the age of 6 and $3,000 per child for ages 6-17. Families are eligible if they meet income guidelines of $150,000 annually for married joint-filers or $112,500 for heads of household, and $75,000 for single parents.
None of this is to say there may not eventually be an official fourth stimulus, as this is still a popular topic in political circles (via CBS San Francisco). This July benefit, however, is specifically child-related.
Childcare benefits may reach many Americans this July
The most common question surrounding new payments and economic support boils down to a well-known phrase “Show me the money.” How and when you’ll get this money can easily dictate both financial planning as well as economic recovery for many families. This credit is an expansion of the existing $2,000 child tax credit and part of the American Rescue Plan, a $1.9 trillion COVID relief act passed by President Biden’s Congress (via CNBC). This is a 2021-ONLY style credit (at least for now) that increases the child tax credit up to $3,000 or $3,600 per child (so $1,000 or $1,600 extra per kid). This new credit suspends the $2,500 earned income requirement from the tax year.
What savvy readers will note is that this is listed as a 2021 tax credit, but that it is set to pay before 2021 taxes are typically filed. That is correct.
Instead of asking taxpayers to wait until next year to reap this benefit, the Biden administration has directed the IRS to start making advance payments in expectation of 2021 filing incomes beginning six months early. More clearly, that means the average family will see stipends beginning in July but not an additional tax break next April (via CNET). There’s a little fine print: 2021 filed returns required, potential overpayment, payment timing variations, and the ability to opt out — but for most — this will be a welcome check or deposit.
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