President Biden has announced that the first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15. Roughly 39 million households — covering 88% of children in the United States — are slated to begin receiving monthly payments.
No action is required on the part of parents and or guardians as eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above.
“For working families with children, this tax cut sends a clear message: help is here,” President Biden said of the payments that are projected to lift more than five million children out of poverty this year, cutting child poverty by more than half.
The American Rescue Plan increased the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children between ages 6 and 17. Households covering more than 65 million children are set to receive the monthly payments through direct deposit, paper check, or debit cards, with the IRS committing to maximizing the use of direct deposit to ensure fast and secure delivery.
The maximum credit applies to married couples with children filing jointly with adjusted gross income less than $150,000, or $75,000 for individuals. Taxpayers who make more than that will still be eligible for the regular child tax credit, which is $2,000 per child under age 17 for families making less than $200,000 annually, or $400,000 for married couples.
To be eligible, the child must be a U.S. citizen, national or resident alien and have a Social Security number. You also must claim him or her as a dependent on your 2021 tax return, and the child must be related to you and generally live with you for at least six months during the year. The child’s name, date of birth and SSN will also have to be included on the return.
More information on how to access the Child Tax Credit will soon be available at IRS.gov/childtascredit2021.