How To Get Stimulus For Baby Born In 2021

Stimulus Update: If You Had a Baby in 2021, You Can Get the Child Tax Credit Money Now. Here's How

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Wondering whether you can take advantage of the Child Tax Credit money now for a baby born in 2021? Well, the good news is you can. Here's what you should know.

The new Child Tax Credit monthly payments have been rolling out to bank accounts and mailboxes for the last couple of months now, and another check should be on its way for parents who qualify on Sept. 15. These checks, worth between $250 and $300 maximum per qualifying dependent, have made a big impact on the finances of households across the nation since they first rolled out in July. And, they'll continue to do so for the next few months, as four more payments (including September's) are scheduled to be sent out before the end of the year.

According to the IRS, more than $15 billion worth of payments, covering roughly 61 million eligible children, are disbursed to households across the nation each month. But, while most parents who qualify are already on the receiving end of these checks, not all households have been so lucky. IRS glitches and other issues have caused some families to deal with delayed payments over the last couple of months, and some households who should qualify aren't yet receiving their payments.

And, some families may not even know they qualify, which is causing them to miss out on the extra cash boost each month. This is especially true for parents who had a baby in 2021. While the Child Tax Credit is based off of the information in your 2020 tax return, you can actually still qualify for the advance on the Child Tax Credit money if your child was born or adopted in 2021. Here's what you should know.

Why new parents are eligible for the Child Tax Credit

A lot of new parents are under the impression that if their baby was born or adopted in 2021, they don't qualify for the Child Tax Credit payments. But, that's not actually the case. Parents who had a baby or adopted a baby or child in 2021 actually can qualify for the Child Tax Credit advance payments.

That's because the Child Tax Credit isn't based on being born prior to 2020. It's based on your child's age at the end of this calendar year. The money families are receiving each month is actually an advance on the Child Tax Credit they qualify for on their 2021 taxes, so any child born prior to the end of 2021 will, in fact, qualify if their family meets the income and eligibility guidelines.

So, should a new parent qualify for the Child Tax Credit payments, they can receive the full $3,600 tax credit, which is split between monthly payments and a lump sum claimed on your 2021 taxes.

But, while the guidelines make it clear that children born during 2021 are eligible for the payment, claiming the money is a little bit more tricky.

The main issue is that the process to determine eligibility for the Child Tax Credit payments is in the hands of the IRS. The federal agency uses your latest tax return -- either 2020 or 2019; whichever is on file -- to determine whether you and your children qualify for the advance payments on the tax credit.

Problem is, a child born or adopted in 2021 would not have been included in the family's most recent tax filings, making it impossible for the IRS to know that there is a child who should be eligible for the payments.

Luckily, there is a new way that parents with new babies will be able to claim the Child Tax Credit to take advantage of the monthly payments. Here's how it works.

How parents with new babies can claim the Child Tax Credit

The Child Tax Credit Update Portal, which is an IRS tool that lets you check on the status of your Child Tax Credit payments and make minor tweaks to your information, will soon get an update that will allow you to report any changes in your filing status, which includes the number of dependents in your home.

This will allow new parents with a baby born in 2021 to take advantage of the payments they qualify for, and will also allow parents who are already receiving the tax credit money for other children to take advantage of the increased payments they now qualify for thanks to a new dependent.

But, the changes to the Child Tax Credit Update Portal haven't happened just yet. According to the IRS, the changes to the system that will allow eligible families to add more dependents won't roll out until later this month. So new parents will have to wait a few more weeks to take advantage of the money.

What that means is that parents who update their information in the system in time for the October check should receive their checks for October, November, and December, which can make a huge difference in household finances when there are diapers and other baby-related payments to cover.

The only downside is that these parents will have already missed the monthly payments for July, August, and September. That doesn't mean the money is gone, though. Families who qualify can still claim the other half of their money, including the missing monthly checks, as part of their 2021 taxes.

Or, if you're a new parent who doesn't need the monthly payments right away, you can always just opt to claim the full $3,600 on your taxes next year. Doing so won't cut into the money you're eligible for; it will all just be paid in one lump sum instead.

Either way, if you meet the eligibility guidelines, you will be eligible to claim the money for the Child Tax Credit for a baby born or adopted in 2021. How you take advantage of the money, whether it's in a lump sum or a lump sum and monthly payments, is your call.

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About the Author

Angelica Leicht is a writer and editor specializing in personal finance content. Her work has appeared in publications such as Interest, Bankrate, The Spruce, Houston Press, and VeryWell.

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How To Get Stimulus For Baby Born In 2021

Source: https://www.fool.com/the-ascent/personal-finance/articles/stimulus-update-if-you-had-a-baby-in-2021-you-can-get-the-child-tax-credit-money-now-heres-how/

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