Child Tax Credit 2021 - Can My Creditors Take it??? (Attorney Response) | Summary and Q&A

TL;DR

The video discusses the new child tax credit introduced under President Biden's American Rescue Plan, how it will be paid out, and its impact on individuals in bankruptcy.

Key Insights

• 👪 The child tax credit provides financial support to families with eligible children under the American Rescue Plan.
• 💳 Income limitations determine eligibility for the child tax credit, with reductions in the credit amount for those exceeding the limits.
• 🚕 The child tax credit will be paid out in monthly installments over six months, with the remaining 50% claimed as a tax credit.

Transcript

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Questions & Answers

Q: How much is the child tax credit and who is eligible?

The child tax credit provides $3,000 for children ages 6-17 and $3,600 for children under six. Income limitations apply, with up to $75,000 for individuals, $112,500 for heads of household, and $150,000 for joint filers being the maximum income thresholds for eligibility.

Q: How will the child tax credit be paid out?

Unlike previous stimulus checks, the child tax credit will be disbursed through monthly payments starting from July 15th, 2021. The payments will be spread out over six months, with the remaining 50% claimed as a tax credit when filing 2021 taxes in 2022.

Q: How does the child tax credit impact individuals in bankruptcy?

The child tax credit will not affect eligibility for Chapter 7 bankruptcy as the payments will not be included in the means test. Additionally, in Chapter 7 and Chapter 13 bankruptcy, the payments will not be seized or used to pay off creditors.

Q: Will the child tax credit increase the amount individuals have to pay in Chapter 13 bankruptcy?

No, the child tax credit will not be taken into account for calculating the payment plan in Chapter 13 bankruptcy. Individuals can keep the funds and use them to aid their financial recovery.

Summary & Key Takeaways

• The child tax credit under the American Rescue Plan provides $3,000 for children ages 6-17 and $3,600 for children under the age of six.

• There are income limitations for eligibility, with reductions in the credit amount for those who exceed the limits.

• Unlike previous stimulus checks, the child tax credit will be paid out over monthly installments starting from July 15th, 2021, and the remaining 50% will be claimed as a tax credit in 2022.