$15 billion from the expanded child tax credit

CTC check
Steve Heap/Shutterstock

On Thursday, the IRS began distributing direct payments to households with kids as part of a pumped-up child tax credit.

A one-year expansion of the credit's maximum per-child amount from $2,000 to $3,600 was a key component of the most recent pandemic aid package, which President Joe Biden signed in March.

Most parents are receiving direct monthly payments of up to $300 for each child under age 6 through the end of the year. For kids ages 6 to 17, the monthly payout is $250.

The direct deposits and paper checks represent half the total credit. The other half can be taken as refunds when families file their 2021 taxes next year.

Biden has proposed keeping the expanded child credit in place through at least 2025, and leading Democrats including House Speaker Nancy Pelosi want to make the change permanent.

The IRS says the first child tax credit payments, totaling around $15 billion, are going to roughly 35 million families. The IRS recently introduced a handy portal where parents can check their eligibility and track their payments.

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More than $5 billion in COVID-related tax refunds

IRS building
Paul Brady Photography/Shutterstock

Biden's COVID rescue package allows Americans who claimed jobless benefits in 2020 to protect much of that money — $10,200 for individuals, $20,400 for couples who file jointly — from taxes.

Because the president signed the stimulus bill in the middle of this year’s tax season, many Americans had already filed and paid their taxes before the change came into effect.

If your income last year was below $150,000 and you collected unemployment, it's possible you paid too much in taxes. If so, you've qualified for a surprise tax refund.

The IRS on Wednesday started distributing a new round of 4 million refunds to people who were on unemployment last year. Officials say the refunds have an average value of $1,265, which works out to a total of about $5.06 billion in money back.

The tax agency says it will continue issuing these refunds of taxes paid on unemployment throughout the summer. If you've already filed your taxes and are deemed eligible for a refund, you'll get yours automatically.

But note that the IRS is struggling with a backlog of 35 million tax returns, so refund delays are possible.

Also available: emergency housing assistance

House and life preserver
Ivanova Ksenia/Shutterstock

Whether you're a homeowner or renter, the federal government has put a mountain of money aside to help you through the coming months.

For renters who have been unable to cover the cost of housing, $46.6 billion has been made available in emergency rental assistance at the state and local levels. Renters who qualify can receive relief to cover up to 18 months of missed and future rent.

The amount of aid varies from state to state. Some states offer eligible renters up to $4,600 a month. Others are providing lump-sum payments of as much as $25,000. In order to collect rental assistance, you must show you’re in need.

Homeowners facing the prospect of foreclosure because of an inability to make their mortgage payments also can seek stimulus relief.

The COVID aid bill from March created a $10 billion homeowner assistance fund, with a minimum $50 million being appropriated for each state, the District of Columbia and Puerto Rico. You can apply through the housing agency for your state or territory.

Applicants must provide evidence they're under financial stress due to the pandemic. You also can't earn more than 150% of your area’s median income, and the balance on your home loan can't exceed $548,250.

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Other ways to boost your finances

Mature couple sitting at home looking at their finance problems
David Prado Perucha / Shutterstock

If you're not eligible for the child credit money, unexpected tax refunds or housing aid, you have plenty of options at your disposal for creating a little more financial breathing room.

If you’re carrying multiple credit card balances and other high-interest debt, consider replacing them with a single debt consolidation loan. The lower interest rate will reduce the overall cost of your debt and help you pay it off faster.

If you’re a homeowner who hasn’t refinanced your mortgage in the past year, you may be leaving money on the table. With mortgage rates now under 3%, mortgage technology and data provider Black Knight estimates that 13.9 million Americans could save an average $293 a month by refinancing.

To make a deeper cut in your housing costs, a little comparison shopping could reward you with savings next time you renew or buy homeowners insurance. The same strategy also might save you hundreds of dollars a year on car insurance.

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About the Author

Clayton Jarvis

Clayton Jarvis

Reporter

Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.

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