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Monthly child tax credit payments start Thursday. Here's what to know
Morgan Watkins, Louisville Courier Journal
Families across the U.S. will start receiving a monthly child tax credit payment Thursday through the American Rescue Plan.
Called an advanced child tax credit, the monthly payments are connected to your income taxes. If eligible, parents may receive half of their annual tax credit money in the form of monthly payments. Parents will receive the other half of the credit when they file their income tax returns.
Here's what families should know about this new benefit:
Am I eligible?
Families with one or more children under 18 years old qualify for the full child tax credit amount this year if their income is less than:
$75,000 for individuals filing their taxes alone
$112,500 for individuals filing as the head of household, such as single parents
$150,000 for a married couple jointly filing taxes
People who earn higher incomes still may be eligible for a smaller child tax credit, depending on how much they earn.
Families will get up to $300 a month for each child up to 5 years old and $250 per month for children ages 6 to 17.
What to know about the Child Tax Credit payments beginning today
'Going to make a difference':How some families plan to spend the extra cash.
What do I need to do to get paid?
Most eligible families don't need to do anything to ensure they receive the monthly tax credit money, Rep. John Yarmuth, D-Ky., said Wednesday.
"If you filed tax returns for 2019 or 2020, or if you signed up to receive a stimulus check from the Internal Revenue Service, you will get this tax relief automatically," he said. "You don't need to sign up or take any action."
The small number of families who don't meet either of those criteria do need to sign up to ensure they receive the monthly payments.
They can do that online at
www.childtaxcredit.gov.
What's different about this credit?
The U.S. government has provided a child tax credit to families for years, but the American Rescue Plan — which congressional Democrats passed with zero Republicans' support this year — made a few major changes.
First: It temporarily increased the size of the child tax credit from $2,000 to $3,600 per child under age 6 and from $2,000 to $3,000 for children who are between 6 and 17 years old.
Second: Instead of providing the tax credit in one lump sum after people file their taxes like the government usually does, the American Rescue Plan allowed families to receive half of that money in monthly installments, starting Thursday and lasting through the end of 2021.
The other half will be provided once they file their taxes next year.
If you get your tax refunds via direct deposit from the IRS, the money should show up in your bank account on the 15th day of each month, according to the White House. Otherwise, you should get a check in the mail.
