Monthly child tax credit payments to start hitting bank accounts July 15

Qualifying families will get monthly payments of up to $300 a month for each child under 6 and up to $250 a month for each child 6 to 17 years old.

By: Lauren Egan

For the first time, the payments, normally given annually as tax refunds, will be distributed monthly. Because the advance payments are beginning halfway through the year, families will get the second half as tax refunds.

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.

The $1.9 trillion Covid-19 relief plan, which the Senate passed in March, boosted the child tax credit program for the 2021 tax year, increasing the maximum payments families can receive per child from $2,000 to $3,600.

Starting in July, families will get monthly payments of up to $300 for each child under 6 years old and up to $250 for each child 6 to 17 years old. The credit goes away once a child reaches 18. Qualifying families can expect to receive the payments on the 15th of each month unless the date falls on a weekend or a holiday.

According to the IRS, the increased amounts are phased out for families with incomes over $150,000 for married taxpayers filing joint returns, along with qualifying widows or widowers; $112,500 for heads of households; and $75,000 for all other taxpayers.

In a call with reporters Sunday night, senior administration officials stressed that switching to monthly payments would allow families to better plan their household budgets.

The officials also said the administration has worked to streamline the payment process and make it easier to navigate, having learned from its experience with the stimulus check payments and in fine-tuning the process.

Still, the officials cautioned that some hiccups are likely during the rollout because it is a new program.

The officials said the administration will pursue an outreach strategy to help Americans take advantage of the program, as well as to raise public awareness that extra money will be showing up in their bank accounts monthly. President Joe Biden will take part in the outreach efforts, the officials said.

Biden has called for extending the child tax credit increases in the American Rescue Plan through 2025, as well as making them permanently fully refundable.

“While the American Rescue Plan provides for this vital tax relief to hard working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come,” Biden said in a statement.

“For working families with children, this tax cut sends a clear message: help is here,” he added

You may also be interested in...