The Biden administration announced Monday that about 39 million families will begin receiving monthly child tax credit payments for the first time starting July 15.
According to details, the expanded credit was established in the American Rescue Plan signed into law in March. In 2021, the maximum enhanced child tax credit is $3,600 for children younger than age 6 and $3,000 for those between 6 and 17.
“For working families with children, this tax cut sends a clear message: Help is here,” said President Biden in a Monday statement.
The first payments will be made on July 15 and subsequent payments will continue to be made monthly through the end of the year, the Treasury Department and IRS announced on Monday.
Eligible parents can expect to receive half of the tax credit in cash payments before the end of the year. The second half of the credit will be applied when families file their 2021 taxes next spring.
Taxpayers who make more than that will still be eligible for the regular child tax credit, which is $2,000 per child under age 17 for families making less than $200,000 annually, or $400,000 for married couples.
Around 80 percent of the families that qualify have direct deposit already set up and do not need to take any additional steps. The other 20 percent will get payments by check or debit card.
Roughly 39 million households, covering 88% of children in the United States (US), will receive the monthly payments. The payments will be calculated based on an eligible taxpayer’s 2020 tax returns.
Under the American Rescue Plan, individuals making up to $75,000, single parent head of household filers making up to $112,500 and married couples who file jointly with a combined income up to $150,000 per year are eligible to receive the full amount.