The Real 'Fourth Stimulus Check': The $3,600 'Stimulus Check' Is Here

Child Tax Credit

The Real 'Fourth Stimulus Check': The $3,600 'Stimulus Check' Is Here

The expanded credit will put thousands of dollars into the pockets of familes across the country.

Key point: If you had the chance to receie $3,600 or more dollars, would you take it in one go or would you ask that it be spread out? That is the choice facing many familes that qualify for the expanded child tax credit.

The Internal Revenue Service will start sending out the enhanced child tax credit from President Joe Biden’s pandemic relief bill in July to eligible families with qualified dependents.

Biden’s American Rescue Plan expanded the existing $2,000 annual child tax break to $3,600 for children under the age of 6 and $3,000 for children between the ages of 6 and 17. The payments began phasing out for single parents earning more than $112,500 and married couples making more than $150,000. The legislation allowed for parents to receive the tax credit through monthly payments of $250 to $300 for each eligible child, depending on age.

But recipients have the option to opt out of the monthly payments if they’d prefer a lump sum after the IRS processes 2021 tax returns.

And besides receiving a large payment next year, Americans may want to opt out if they know their circumstances will change and don’t want to update their family-related information on the agency’s portal that’s expected to be launched July 1. 

Other recipients have been concerned that the IRS will send them too much money for their qualified dependents through monthly payments, forcing them to pay the agency back next year.

But if eligible families decide to opt out of the recurring payments, they won’t see the enhanced tax credit until after the IRS processes their 2021 tax returns next year. The payment will come with the future tax refund.

Families must update their information on the agency’s portal and file taxes by the May 17 deadline, or else they will be automatically enrolled in the monthly payments.

As the IRS prepares to pump out billions of direct payments for child tax credit in less than two months, Biden has called on Congress to temporarily extend the enhanced measure for four more years through his American Families Plan.

This push caused clashes with a group of congressional Democrats on Capitol Hill, as several party members think offering a temporary extension of the child tax credit falls short of providing enough relief to American families.

Democrats from both congressional chambers held a press conference this week, urging the White House to make the credit permanent.

“Some have been concerned about the cost. I say the cost of inaction is too great,” Rep. Suzan DelBene (D-Wash.), a proponent of the permanent child tax credit push, told reporters Tuesday. “The president will propose his plan. Congress is going to write the bill.”

Democrats argue that the expanded family benefit would help lift millions of children out of poverty.

“This is a lifeline to the middle class, it puts money in families’ pockets and it cuts all child poverty in half. It provides children and their families with additional payments throughout the year that help them with the cost of food, child care, diapers, health care, clothing and taxes,” Sen. Rosa DeLauro (D-Conn.) said.

Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill. This first appeared earlier and is being reposted due to reader interest.

Image: Reuters.