Good news for American families: the IRS plans to begin sending payments from the new $3,000 child tax credit in July, Commissioner Charles Rettig said.<\/b>
\nThere’s good news for American families. The IRS plans to begin sending monthly payments from the new $3,000 child tax credit in July, Commissioner Charles Rettig said Tuesday during a hearing with the Senate Finance Committee. The new and significantly expanded child tax credit was included in the $1.9 trillion American Rescue Plan signed into law by President Joe Biden in March. Under the law, families will receive a $3,000 annual benefit per child ages 6 to 17 and $3,600 per child under the age of 6 for the 2021 tax year. Just a few months ago, Rettig testified that the IRS wasn’t sure it would be able to begin sending payments to families in July and that the checks might not be on a monthly basis at first. He said that the agency was overwhelmed with the extended tax filing season, which was moved to May 17 from April 15 for individuals, and thus had less time and resources to devote to implementing and launching a portal for the child tax credit. But on Tuesday, when Sen. Sherrod Brown, a Democrat from Ohio and ranking member of the Senate Banking Committee, asked Rettig if the IRS would be ready to start monthly child tax credit payments in July, he had a simple answer. \u00ab\u00a0We are,\u00a0\u00bb Rettig said. \u00ab\u00a0If we end up not being on track for some unforeseen situation we will advise you and the committee.\u00a0\u00bb The full credit is available to individuals who have children and adjusted gross income of less than $75,000, or $150,000 for a married couple filing jointly. The benefit will phase out for taxpayers who make more money, and cease for individuals earning $95,000 and married couples earning $170,000 filing jointly. The credit is scheduled to be disbursed to families on a monthly basis beginning in July and will continue through December 2021. The monthly amounts generally will be $250 for older children and $300 for children under the age of six. Families will claim the remaining half of the credit when they file their 2021 income tax return in 2022. The child tax credit is a major component of the plan to lift millions of children out of poverty. A family of four making less than $150,000 could see more than $14,000 in pandemic relief this year from the expanded child tax credit and $1,400 stimulus checks to both adults and children. About 83 million children live in households that would benefit from the expansion of the child tax credit, according to a study from the Institute on Taxation and Economic Policy. In addition, the poorest 20% of families would see income increase by more than 37% during the year that the policy is in place. However, one criticism is that it only expands the credit for one year. After 2021, the expanded credit will cease, and families will see a smaller boost to their income unless further legislation is passed to continue or build upon the new rules. To see how much you could expect to receive, personal finance website Grow created a calculator that factors in your filing status, annual income and the number of dependents you have. SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox. CHECK OUT: How to make money with creative side hustles, from people who earn thousands on sites like Etsy and Twitch via Grow with Acorns+CNBC. Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.<\/p>\n