If you have one or more children age 17 or younger, you may qualify for a new monthly payment of as much as $300, thanks to a new advance tax credit that’s part of the American Rescue Plan passed earlier this year.
Starting July 15, 2021, the Federal government will begin distributing monthly child tax credit payments to eligible U.S. households with children. The payments are a monthly advance on 2021 taxes, with a total benefit amount of up to $3,600 for children younger than 6 and up to $3,000 for children between 6 and 17. The maximum monthly benefit for each child will be either $300 per month or $250 per month, through the end of 2021, depending on the age of the child.
Got questions about how this whole program will work? We’ve got answers. Here are some of the most important things to know about this stimulus program.
Will my family qualify for this child tax credit?
Most U.S. families with children age 17 or younger will qualify for some portion of this tax credit, depending on their annual income.
To get the full amount, married couples who file jointly will need to make an adjusted gross annual income of less than $150,000, or $75,000 for individual parents.
Parents whose income is higher than this threshold will get progressively smaller payments the more they make over those limits. Married couples who earn $170,000 or more, and individuals who make $95,000 or more, will not receive this tax benefit, but will still be eligible for the regular child tax credit.
What do I need to do to get my monthly payment?
Most eligible families won’t have to do anything to begin receiving this monthly child tax credit. The Internal Revenue Service (IRS) will base its eligibility decisions on 2020 or 2019 tax returns, whichever is the most recent filing available.
If you do not normally file taxes, you will need to sign up for the benefit via the IRS registration page.
How do I know if my monthly payment has hit my bank account?
The best place to check on the status of your monthly child tax credit payment is with the IRS, which will be providing an online tool where you can check your eligibility, manage and un-enroll from payments.
If you’re signed up for your bank’s online or mobile banking, you can log in and check your balance any time for recent deposits, or even set up account alerts to get a notification about the deposit.
Similar to the Economic Impact Payments, your bank will not have any information about when payments will come through or about pending payments that have not yet hit your account.
How are payments being sent out?
Most of the monthly child tax credit payments will be sent out using direct deposit. If you received any of the previous Economic Impact Payment checks this way, it’s likely your child tax credit will arrive that way, too. The IRS will also be mailing out paper checks to some families for which it does not have direct deposit information.
After July 15, when do the next payments go out?
The IRS is planning to make future payments on the 15th of each month, except for weekends and holidays, when it will be sent on the next closest business day. These payments are currently scheduled to continue through the end of 2021, with the second half of the total benefit being received when families file their 2021 taxes in 2022.