The monthly tax credit advance begins next month unless Americans wish to opt-out. The IRS says information is on the way to your mailbox.
Millions of Americans who may be eligible for the monthly Child Tax Credit starting next month should be expecting a letter in the mail from the Internal Revenue Service in the coming days.
Under the American Rescue Plan signed in March, Americans with qualifying children will get an advance on Child Tax Credit they normally receive at tax time (it was $2,000 for the 2020 tax year, but has been expanded). Starting July 15, the monthly payment will be $300 for each child under age six (or $3,600 for the year) and $250 for each child 6-17 (or $3,000 for the year).
Half the money will come via monthly payments through December and half will come when taxes are filed in 2022. Parents will have the option to opt out of the monthly advance and just take it all at tax time. An online portal for that is expected on July 1, and there will be version in Spanish
The IRS said it has started sending letters to 36 million American families it has identified as being eligible for the monthly payments. Those people were identified either through their 2019 or 2020 tax returns or by using the Non-Filers tool last year to get their COVID stimulus checks.
A second, personalized letter will let parents know the estimated amount they will receive per month, the IRS said.
The IRS says eligible families who have not filed their 2019 or 2020 returns should do so right away in order to get the payment. This may include people who are homeless or the rural poor, the agency said.
The maximum Child Tax Credit will be available for those with the following Adjusted Gross Incomes:
- $75,000 or less for singles,
- $112,500 or less for heads of household, and
- $150,000 or less for married couples filing a joint return and qualified widows and widowers.
Why monthly payments vs. a lump sum like it has been? Outside analysts estimate that the payments could essentially halve child poverty. The idea is that rather than get the money all at once, parents who are struggling can get the money as they need it for essentials like food, diapers, medicine and child care.
Under his American Families Plan, President Joe Biden is calling for the monthly Child Tax Credit to be extended through 2025. Several Democrats in Congress want it made permanent.
The Associated Press contributed to this report.