WEST PALM BEACH, Fla. — Now that about 39 million families will begin receiving monthly child tax credit payments starting July 15, here are five things to know before you act.
What is it?
The expanded credit was established in the American Rescue Plan signed into law by President Joe Biden in March.
It increases the maximum child tax credit in 2021 to $3,600 for children 5 or younger and to $3,000 per child between 6 and 17.
"For working families with children, this tax cut sends a clear message: Help is here," Biden said in a statement Monday.
Most American families qualify for some amount of money through the child tax credit.
The full credit is available to married taxpayers filing a joint return with an adjusted gross income less than $150,000 or $75,000 for individuals. The enhanced tax credit will phase out for taxpayers who make more money and cease for individuals earning $95,000 or more and married taxpayers filing jointly earning $170,000 or more.
Taxpayers who don't qualify will still be eligible for the regular child tax credit, which is $2,000 per child under 17 at the end of the year.
What do I need to do?
Most eligible families don't have to do anything at this point, according to the Internal Revenue Service.
How will I receive the payment?
The increased payments will be made on the 15th of each month, unless it falls on a weekend or holiday, at which point the money will be sent on the closest business day.
The IRS recommends that taxpayers set up direct deposit for faster payments and future advance child tax credits.
These payments are only scheduled through the end of the year.
What if I don't want the tax credit?
Families can opt out of receiving the monthly payments for the credit. Those taxpayers will still be eligible to receive the full credit for which they qualify when they file their taxes next year.