Child tax credit payments start going out July 15
The expanded monthly tax credit payments announced by the White House in May will begin going out Thursday, according to the Treasury Department.
The big picture: The enhanced child tax credit, which is part of President Biden's $1.9 trillion COVID relief package, will provide eligible families with $300 monthly cash payments per child up to age 5 and $250 for children ages 6–17.
- About 39 million households — and 88% of children in the U.S. — will be covered by the monthly payments, the Treasury Department said in a statement in May.
- The administration has touted the program as key to drastically cutting child poverty levels and could affect families of more than 65 million children, per CNN.
How it works: The IRS will begin sending out the payments on July 15, and monthly installments will be sent out on the 15th of each month through the end of the year unless this day falls on a weekend or holiday, in which case the payment will be sent earlier, per a Treasury Department spokesperson.
- "The vast majority of payments will be made by direct deposit so many people will see funds available in their accounts on the 15th. For those receiving money by check, those will be sent out before or on 7/15," said the spokesperson.
- The tax credit will also be fully refundable, in order to encourage more low-income families to take advantage, per CNN.
- Families can use a specific IRS portal to update their bank account information or unenroll in the advance payments if they do not wish to receive them.
- On Monday the IRS launched its CTC eligibility tool in Spanish and step-by-step guides for its non-filer sign-up tool in Spanish, Chinese Simplified, Korean, Vietnamese, Haitian Creole and Russian, according to the Treasury spokesperson.
Of note: The administration has conducted outreach efforts to families who haven't filed tax returns or used the IRS portal to receive stimulus checks to inform them of their potential to benefit from the child tax credit.
The enhanced CTC is available for taxpayers who have an adjusted gross income (AGI) of:
- $75,000 or less for single filers;
- $112,500 or less for heads of household; or
- $150,000 or less for married couples filing a joint return and qualified widows and widowers, per the IRS.
What to watch: The expanded child tax credit is only in effect through 2021, but some Democrats hope to extend it.