Most American families with children will start receiving $300 per child each month from July 15, announced the Biden administration on Monday. This child tax credit is a temporary benefit that will be sent out to nearly 39 million households in the U.S.
President Biden’s 1.9 trillion coronavirus rescue package has led to the increase in child tax credit that will be given to families through direct deposit, while the rest will receive debit cards or written checks in their mail.
These payments will be received by parents on the 15th of each month unless a holiday or weekend clashes with the dates. For each child under 6, parents would be allotted $300, whereas those who have children between the ages of 6 to 17 would receive $250 from July till December.
Child tax credit payments would primarily be based on last year’s returns of taxpayers or their 2019 returns if 2020 returns are not fully processed. Meanwhile, in order to cover low-income households that aren’t part of the process of filing taxes, the Internal Revenue System is creating a portal where their information can be submitted and vetted for eligibility.
As a result, the low-income homes would not only be able to collect their child tax credit, but also receive their stimulus checks which they might have previously missed. Moreover, the IRS is also opening up a new portal to give parents the opportunity to update missing information, including their address, bank account details, and family size.
Through this portal, parents will also be given the chance to choose their mode of payment; they can either opt for monthly payment or choose to go for a lump sum amount next year when returns are filed. If the family size changes during the year, the IRS will adjust payment when they file the 2021 tax return to redeem the second part of the credit.
In the initial stages of the plan, the IRS was hesitant to provide the child tax credit on a monthly basis. However, Commissioner Charles Rettig has declared that the organization is on the right track to start giving out the payments from July onward. The expansion in child tax credit has immense potential for the future of the US and is expected to help parents out during the hard-hitting COVID pandemic.