In a month, 36 million households can expect to see monthly child tax credit payments, according to the IRS.
The expanded child tax credit established under the American Rescue Plan was signed into law by President Biden in March. Starting on July 15, taxpayers who are eligible to receive the payout will get at least $250 per month. Here’s a breakdown of what to expect from the installments.
A maximum enhanced child tax credit is $3,600 for children younger than age 6 and $3,000 for those between 6 and 17. This equals $300 per month for each child under the age of 6, and $250 for those between the age of 6 and 17.
Who qualifies for the full benefit?
Married couples filing jointly who have children with adjusted gross income less than $150,000, or $75,000 for individuals.
The credit will phase out for taxpayers who make more that $95,000 for individuals, and $170,000 for married couples filing jointly.
Here’s what families need to know ahead of the July 15
Most families qualify for some amount of money, but is it worth it to opt into taking the advance? Most experts believes it’s all about individual situations. All of them say the best way to plan for payments is by consulting a tax advisor.
If you make more than the amount required for the enhanced tax credit, you’ll still be eligible for the regular child tax credit which is $2,000 per child under age 17 for individuals making $200,000 annually or $400,000 for married couples.
The IRS will determine the payments based on 2020 tax returns, or those from 2019, if the previous year hasn’t yet to be filed.
If your situation has changed over the past year, the IRS has opened a portal to give them updated information. Please visit irs.gov for more information.
When can I get paid?
The child tax credit payment will be distributed like the rounds of stimulus checks over the previous year. A majority will be sent by direct deposit — some 80% of those eligible will get the money this way, according to the IRS. As for the rest of the eligible taxpayers, a paper check will be mailed out within a week of the payment date.
The 15th of the month from July until December; unless that lands of a holiday or weekend– July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15, and Dec. 15.
So far, the monthly payments are only scheduled through the end of 2021. Biden has suggested making the enhanced credit available through 2025, according to reports.