Millions of American families have already started to receive monthly payments from the IRS following the enactment of President Biden’s coronavirus relief law that included an expansion of the child tax credit. The $1.9 trillion relief bill boosted the child tax credit. Previously, the credit was worth up to $2,000 for every child under the age of 17, but the new law allows for a credit of up to $3,600 for children under the age of 6, and $3,000 for every child between 6 and 17 years old.
Half of the money—about $250-$300 per month—will be paid out in six cash installments beginning July 15 with five more payments on or about the 15th of each month from August through December of this year, for a total of up to $1800 per child. Families will get the remainder of the money as a tax credit when they file their 2021 tax returns.
There are income limits on eligibility for these tax credits. Individuals earning $75,000 or less, married couples making $150,000 or less, and a single parent filing as the head of household making up to $112,500 are eligible for the new tax credits.
To get the cash payments, the vast majority of families won’t have to do anything. If your 2021information hasn’t changed—you have the same address, the same bank account number, your income is about the same, and you have the same number of kids. you’re probably all set. However, if something has changed, you should go to irs.gov, look for the entry for “Child Tax Credit” and update your information. This portal also allows you to find out if you’re eligible to receive advance payments.
