Some families will start receiving enhanced child tax credit monthly payments of up to $300.
Monthly payments through the new federal enhanced child tax credit will begin July 15. The credit will go to roughly 39 million households with about 65 million children, or 88% of children in the U.S.
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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. Households will receive the CTC payments through direct deposit, paper check or debit cards, though the Treasury and IRS said they are committed to maximizing the use of direct deposit so payments arrive quickly and securely. IRS Commissioner Charles Rettig has previously said that the agency will be setting up an online portal where taxpayers will be able to choose whether or not they will participate in the monthly payments.
The Child Tax Credit, which is intended to help parents offset some of their federal tax burden, got a major boost from the American Rescue Plan passed in March. The biggest change is that half of the total 2021 expanded CTC will be paid out in these monthly payments. Plus, the legislation increased the total amount of the credit from $2,000 per child in 2020 to $3,600 per child under 6 and $3,000 per child ages 6 to 17 this year. Joint filers with an AGI above $150,000 and heads of household with an AGI above $112,500 won’t qualify for the entire benefit, but many will be eligible for a percentage of the benefit. The CTC phases out by $50 for every $1,000 of income over the maximum amount.
ARTICLE: PAUL MURDOCH
POLITICS EDITOR: CARSON CHOATE
PHOTO CREDITS: YAHOO NEWS