HomeStimulus CheckHere's How to Get a $5,000 Refund from the Stimulus — for...

Here’s How to Get a $5,000 Refund from the Stimulus — for New Parents

As part of the federal government’s response to COVID-19, the enhanced child tax credit for 2021 is a one-time benefit payment for parents. Every year, parents can apply for the child tax credit, but this benefit is typically only available to those who pay taxes.

In the previous year, this credit was open to all low-income parents with children under the age of 17 who met certain criteria. It was also completely refundable, so there was no obligation to repay it.

Now, parents who had children born in 2020 or later are eligible to claim the credit, as well as those who had children born in 2021 or later. The primary requirement is that claimants have earned less than $75,000 as an individual or $150,000 as a couple before filing for benefits.

Here's How to Get a $5,000 Refund from the Stimulus — for New Parents

The 2021 Recovery Rebate Credit will allow new parents to receive up to $5,000 based on last year’s taxes. Last year’s child tax credit for children under the age of six, including newborns, was $3,600. The rebate credit for dependent children—meaning you can claim your newborn for this credit as well—adds another $1,400 to the total of $5,000, making it possible to claim all of your dependent children for this credit.

It was part of the third stimulus payment that parents could claim for each of their dependent children, so if your child hadn’t been born by the time you could claim them last year, you would have missed out on this $1,400 payment.

Also Read: Contrary to what some have claimed on social media, there are no plans for a fourth Stimulus Check

So that you can benefit from the 2021 tax credits, you must file your taxes by April 15, 2020, and claim your newborn as a dependent if the baby was born after that date. It’s important to take advantage of this credit now because the enhanced child tax credit is not permanent and will return to its $2,000 maximum for the 2022 tax year.

James Carter
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