The U.S. Treasury and the Internal Revenue Service (IRS) announced Monday that the first payments from the Child Tax Credit will begin on July 15, and approximately 39 million households — which represent 88% of the children in the country — will start seeing those payments automatically.
The expanded tax credit, which was included in President Joe Biden’s $1.9 trillion American Rescue Plan, gives families a $3,000 per child benefit annually for kids 6-17, and $3,600 per child for kids under 6 for the 2021 tax year.
Families will start seeing payments of up to $300 per month for children under 6, and up to $250 per month for 6-17, on the 15th of each month, unless the 15th falls on a weekend or holiday, the Treasury and IRS announced.
The American Rescue Plan, the COVID-19 relief bill that President Biden signed into law in March, is projected to cut child poverty in half, according to an analysis from the Center on Poverty and Social Policy at Columbia University.
The full credit is available to individuals with children who make less than $75,000 annually, or couples filing jointly making less than $150,000 per year. The benefits gradually reduce for taxpayers who make more than that, suspending for people who make more than $95,000 annually, or couples making $170,000 per year.
Families and individuals making more than that can still qualify for the regular child tax credit — $2,000 annually per child under 17 for married couples making less than $400,000 annually, or individuals making under $200,000 per year.
The credit is also fully refundable, according to the IRS, meaning that taxpayers can benefit if they don’t owe income taxes, or don’t have earned income.
The monthly payments will continue through Dec. 2021. The remaining half of the tax credit can be claimed in 2021 tax refunds when you file your taxes in 2022. For more information on the Child Tax Credit from the IRS, read more here.