Millions of families will start receiving payments in July.
As part of the American Rescue Plan signed into law by President Joe Biden earlier this year, American families will begin receiving an expanded Child Tax Credit (CTC) starting on July 15. What does that actually mean? Well, starting on July 15, around 36 million American families will start receiving monthly checks from the IRS for up to $1,800 a pop. In general, the expanded CTC increases the yearly benefits a family gets from having kids from $2,000 to $3,600. But are all families eligible for this new plan?
The current iteration of the CTC provides a $3,600 credit for every child in a family under the age of 6, as well as a $3,000 credit for children between the ages of 6 and 17, fazing out entirely above 17. This translates to monthly payments of $300 per month per child under 6 and $250 per month per child between 6 and 17. However, much like the stimulus checks sent out during 2020, the expanded credit only applies to parents in particular annual income brackets. It breaks down like this:
- $75,000 or less for single parents
- $112,500 or less for heads of household
- $150,000 or less for married couples filing jointly
If your family’s income is above those levels, you can still receive tax credits, but they’ll gradually decrease until you lose eligibility entirely at single incomes above $95,000 and joint incomes above $170,000. Your precise eligibility will be determined by whatever your most recent tax return was. Hopefully, you filled out your 2020 taxes properly, because if the information is off somehow, that could lead to problems for you. If your information is out of date and you receive tax credit money you’re not actually entitled to, you will be required to pay all of it when filing your taxes next year.
The Child Tax Credit means help directly in the bank accounts of the families who need it. Nearly all working families will automatically get monthly payments starting July 15th – no action needed. Head to https://t.co/P2RRSAlEgx for more information. pic.twitter.com/U1eSsBi18p
— President Biden (@POTUS) June 21, 2021
If you’re unsure about your eligibility, check out the IRS’ new CTC portal to check your status. If your information is outdated and you’re no longer eligible, make sure to opt out of payments so you don’t have to give it all back next year.