American parents are in for a payday.
The federal government will begin forking over monthly payments to millions of US families July 15 under President Biden’s controversial expanded child tax credit plan.
The cash — approved as part of the Democrat’s $1.9 trillion stimulus package in March — aims to prevent child poverty.
But critics say the checks, which are part of Biden’s coronavirus relief plan, are an expansion of the welfare state and a disincentive to work.
Here’s what you need to know about the child tax credit, including whether you’re eligible.
Who qualifies for the expanded child tax credit?
The expanded payments will go to couples who earn $150,000 or less per year along with heads of households who earn $112,500 or less. Individuals who earn $75,000 or less also qualify, according to the IRS.
How much will I get for the child tax credit?
It depends on your situation.
Eligible families with kids under the age of 6 will receive a total of up to $3,600 per child, while families of older children between the ages of 6 and 17 could get up to $3,000 per kid. That’s an increase from the regular child tax credit of up to $2,000 for each child up to age 17.
The credit then plateaus at $2,000 per child before it starts to phase out for single parents earning more than $200,000 and married couples bringing home more than $400,000 annually.
Parents who aren’t US citizens can also receive the payments for their children who are citizens — as long as they have a taxpayer identification number and their kids have a valid Social Security number.
All families can check their child tax credit eligibility via this IRS website.
When do child tax credit payments begin?
The federal government will begin sending payments on July 15 and parents will then receive their cash on a monthly basis.
How much will I receive each month?
Parents will receive up to $300 per month for each child under age 6 and $250 for each kid ages 6 to 17. This means that eligible families will receive half of their total credit from now until the end of the year.
Parents can claim the other half when they file their 2021 taxes next year.
Families who would prefer to receive the money as a lump sum can also opt out of the monthly installment plan via this IRS portal.
How will the money arrive?
The cash will be paid out through direct deposit, paper checks and debit cards, according to the agency.
The majority, roughly 80 percent of parents, will receive the payment via direct deposit.
What do I have to do to get the child tax credit?
Most families will automatically receive the payment because they already filed 2019 or 2020 returns claiming the credit, according to the IRS.
A total of 39 million households with 88 percent of American kids will get the payment. The IRS will also send the credit to parents who previously used its portal to register for COVID-19 stimulus checks.
Families who haven’t filed tax returns in the past two years can use another IRS portal to register to receive the child tax credit by providing information on their households and bank accounts.
Parents can also check whether they’re enrolled to receive advance payments via this IRS portal.
