Here’s When You Can Expect to Get Your Child Tax Credit — and How Much Money You’ll Get
IRS Commissioner Chuck Rettig said child tax credit payments should begin in July
If all goes according to plan, American families should start seeing monthly payments in July, courtesy of the newly expanded child tax credit, according to IRS officials.
IRS Commissioner Chuck Rettig said the agency "fully anticipates" to launch the child tax credit portal by July 1, with payments going out on a monthly basis.
"It's going to be as user-friendly as possible," Rettig said Tuesday as he testified before the Senate Finance Committee. "We have already put our teams together and our working groups together and we're looking at communication strategies and all the rest."
The payments come thanks to the $1.9 trillion American Rescue Plan Act, which President Joe Biden signed in March. Eligible parents or caregivers will receive a $3,600 tax credit for each child 5 and under, and a $3,000 credit for kids ages 6 to 17 for the 2021 tax year.
"Before, the credit was timed to the tax system — file your taxes by April 15, the government sends you a check in six-eight weeks, if it owes you something," Lisa Gennetian, a professor of early learning policy studies at Duke University, previously told PEOPLE. "Now, the money can be distributed as monthly advance beginning in July."
Gennetian explained that the child tax credit is not new, but that this expansion is notable in terms of the impact it will likely have both on families and on overall child poverty.
The new plan increases the amount and the age limit of eligible children, and also waives the $2,500 earning requirement for parents or caregivers, so that those are not employed can still benefit.
Another notable change is that eligible parents and those with dependent children can now also get an advance on half of their 2021 credit in the form of monthly payments of $250 or $300 per child.
"The impacts on racial disparities are very dramatic," Alexandra Cawthorne Gaines, vice president of the Poverty to Prosperity Program, previously told PEOPLE. "This could cut deep poverty in half."
Tax credits are amount that taxpayers can subtract directly from any taxes owed, and the child tax credit has traditionally given eligible parents a $2,000 annual credit for each child under 17 years old.
Those now eligible for the expanded tax credit include single-filers making up to $75,000 annually, heads of household making $112,500 annually and married couples filing jointly who make $150,000 annually.
After that income cutoff, the expanded credit begins to phase out in increments as income increases. Those making up to $200,000 remain eligible for the original $2,000 credit.
The monthly payments will go to bank accounts from July through December, and remaining funds will be distributed as lump sum payments in 2022, after 2021 taxes are filed.