Nearly 90 percent of U.S. children will receive monthly child tax credit benefits starting July 15, with about 39 million families expected to benefit, the U.S. Treasury Department said Monday (May 17).
The credit is part of President Biden’s $1.9 trillion epidemic relief plan, which expands the child tax credit for one year and provides for monthly prepayments. Nearly 88 percent of children will receive the benefit, and their parents will not need any additional paperwork to receive it.
Families who qualify will receive up to $300 per month for each child under age 6 and up to $250 per month for children ages 6 to 17.
In the past, the U.S. child tax credit was capped at $2,000 per year and was only paid to families who had an income tax liability after filing with the Internal Revenue Service (IRS).
This year, however, couples earning less than $150,000 per year can receive the child credit on the 15th of each month, and the IRS will remit the payment directly to most families’ accounts. For tax year 2021, each child between the ages of 6 and 17 will receive a total refund of $3,000 per year, and under age 6 will receive a benefit of $3,600.
The IRS will determine eligibility based on tax information for 2019 and 2020. Taxpayers can check for updates through the online portal. The government will also later create another online portal for non-filers who qualify for the child tax credit.
The IRS said that because the new rules allow the child tax credit to be fully refundable, it makes low-income families eligible as well. The advance payment for the 2021 child tax credit will be paid to eligible taxpayers from July through December, on a regular basis, and the advance payment will be estimated based on information contained in the taxpayer’s 2020 tax return (or 2019 tax return if the 2020 return has not yet been filed and processed), the agency said. The advance would total up to 50 percent of the child tax credit.
Biden said Monday that he has proposed extending the child tax credit through 2025 as part of his $1.8 trillion American Families Plan. The plan has the support of most Democrats in Congress. Republicans, on the other hand, are opposed.
Republicans say the current American Families Plan and jobs plan contain too many provisions unrelated to traditional infrastructure such as roads, bridges, water pipes and power lines, and point out that the bills amount to an epidemic economic stimulus package that would lead to higher inflation, which would raise the cost of all U.S. goods and services. McConnell mentioned after meeting with Biden at the White House last week that “Senate Republicans are not interested in revisiting the 2017 tax bill. I think the president and vice president understand that.”
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