Not only financial aid checks: what money from the government US residents will receive in the coming months

The third financial aid package adopted in March in connection with the coronavirus provides not only direct payments to Americans, but also tax credits for the unemployed and parents of minor children. Let's take a look at the details of how to get them.

Tax deductions for the unemployed

They are eligible for those who at some point last year received unemployment benefits and filed their tax returns for 2020 before the IRS revised Form 1040 and added this deduction to them.

In 2020 alone, unemployment benefits up to $ 10 can be deducted from taxable income (if your annual income is less than $ 200). This deduction can be up to $ 150 for couples.

People who have not yet filed their 2020 tax returns can claim this deduction through a new column Unemployment Compensation Exclusion Worksheet, which was added to Form 1040. In this case, the money for this deduction will come along with the regular tax refund.

But many people filed their tax returns before the law change on March 11, or before the IRS revised Form 1040.

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The IRS didn’t say what these people should do for a long time. But she recently announced that they will be paid the deduction automatically without any action on the part of the taxpayer. First, the deductions will be calculated and listed for those who filed the declaration individually, then for the couples. These payments, according to statements by representatives of the IRS, will begin to be sent in May 2021.

Important: This change only applies to unemployment benefits for 2020. If you received unemployment benefits this year, they are fully taxable and non-deductible.

Monthly payments for parents

Most parents of children under the age of 17 are eligible for the Extended Child Tax Credit. It will come in monthly payments in the second half of this year instead of a one-off payment at the time of filing next year's tax return.

The IRS promises to start these payments in July 2021.

Monthly payments will be $ 300 per child under 6 and $ 250 per child ages 6-17. This is the result of an increase in the child tax deduction from $ 2000 per year (payable in a lump sum during the tax period) to $ 3600 per year for young children and up to $ 3000 for children 6 years of age and older.

The plan calls for six monthly installments until the end of the year, with the remainder due upon filing next year's tax returns. It is possible that payments will not be made monthly, but at some other interval, the IRS has not yet provided an exact schedule.

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The IRS seeks to create a portal where eligible people can provide corrected or updated information about their income and data. Eligible parents are advised to be proactive and file tax forms with the IRS, even if they have no income to report.

Important changes in the conditions for obtaining the tax credit for children in 2021:

• The parent must have previously had an income of at least $ 2500 to be eligible; there is no minimum income for 2021.
• The previous child tax credit applied to parents of children under 16; now - up to 17 years old.
• People without tax liabilities have not previously received the full amount; in 2021, they are eligible for full payment.
• High-income individuals are not eligible for the full amount; the child loan will be reduced by $ 50 for every $ 1000 of income over $ 150 for a married couple filing together; or over $ 000 for those who are applying as the sole head of the household.