As part of the expanded Child Tax Credit program, the IRS has begun issuing advance tax credit payments via direct deposit to eligible recipients. The payments are being distributed monthly between July 15 and December 15, 2021, to the bank account on file with the IRS. The Child Tax Credit amount has been increased for 2021, with 50% of the payments being issued over the next several months. The IRS will issue the remaining 50% once the 2021 taxes are filed the following year.
These payments provide supplemental funds to families and can be used for any household expenses. Auto insurance costs may not be the first expense to come to mind. However, insurance is required to drive legally in the state of Maryland. Using your Child Tax Credit payments to purchase or keep your insurance in force is a smart way to invest this extra money and can even save you money in the future.
You can use the funds towards the cost of insurance to make a larger down payment, so you have smaller monthly payments over the rest of the policy term. If you already have a policy in force, you can put the money towards your monthly payments or, if your policy is financed, making larger payments to reduce interest costs, it will reduce the amount you owe. Keeping your auto insurance policy in force for the entire term can help reduce the amount of your policy. Uninterrupted coverage can qualify you for discounts or eligibility with standard carriers, which require 6-months to a year of continuous coverage.
Keeping your insurance in force will also help you avoid uninsured fines from the Maryland Department of Transportation Motor Vehicle Administration (MDOT MVA). These fines start at $150 for the first 30 days, then $7 every day after. That can add up to $2,500 per year, per vehicle.
Talk to an insurance professional today if you’d like to learn more about using your Child Tax Credit payments toward auto insurance. Find an authorized Maryland Auto provider near you by visiting our Find an Agent page.
For more information about the Childcare Tax Credit, click here. You can also click here to see if you’re eligible for these payments.
For auto insurance and financial resources, click here.
