Millions of families will start to receive monthly payments from the IRS on Thursday, following the enactment of President Biden ’s coronavirus relief law that …
Millions of families will start to receive monthly payments from the IRS on Thursday, following the enactment of President Biden ’s coronavirus relief law that included an expansion of the child tax credit. The $1.9 trillion relief measure from March increases the credit amount for 2021 and directs the IRS to make periodic advance payments of the credit through the end of the year, so that families receive funds in installments rather than in a lump sum when they file their tax returns in 2022. Democrats say the expanded tax credit will help to substantially reduce child poverty, and the monthly payments will help families cover important expenses as they occur. Many Democratic lawmakers want to pass legislation later this year to make the one-year expansion of the credit permanent. Here’s what you need to know about the monthly child tax credit payments. Monthly payments will be up to $300 per child Biden’s coronavirus relief law increased the maximum amount of the child tax credit for 2021 from $2,000 for children under 17 to $3,600 for children under 6 and $3,000 for children ages 6 through 17. Married couples with income of up to $150,000 and single parents that use the head-of-household filing status with income of up to $112,500 are eligible for the full increased credit amounts. The credit will be fully available to the lowest income households, and the IRS has been directed to set up a program on advanced payments. The agency is starting monthly payments of the credit on Thursday, and will make payments on or near the 15th of each month through the end of the year. The monthly payments will be as much as $300 for children under 6 and $250 for older children. Families will typically receive half their credit amount for 2021 in the form of the monthly payments this year, and they will receive the rest when they file their tax returns next year. Some low-income families need to register for the monthly payments The Biden administration has said that about 39 million households, covering almost 90 percent of children in the United States, will receive monthly payments automatically. Families slated to receive automatic payments include those that filed 2019 or 2020 tax returns and families that used the IRS’s non-filer tool for stimulus payments last year.
