This Is Big: 39 Million Families to See Child Tax Credits Money in July

This Is Big: 39 Million Families to See Child Tax Credits Money in July

The Biden administration announced Monday that nearly 39 million families are expected to receive the monthly child tax credit payments for the first time beginning on July 15.

 

The Biden administration announced Monday that nearly 39 million families are expected to receive the monthly child tax credit payments for the first time beginning on July 15.

The payments are part of President Joe Biden’s $1.9 trillion coronavirus rescue package, which enhanced the child tax credit from $2,000 to $3,000 and allowed parents with children under the age of six to qualify for $3,600. The program was designed to significantly reduce child poverty, White House officials said.

 

Eligible families will receive half of the credit through monthly cash payments, which could be between $250 and $300 a month for each child, and the rest of the tax relief can be claimed on their 2021 tax returns.

Nearly 80 percent of the families that qualify for the expanded tax relief already have direct deposit set up and do not need to take further action. The remaining 20 percent will receive the payments by check or debit card.

Starting in July, single parents with annual incomes up to $75,000, heads of households earning $112,500 and joint filers making up to $150,000 per year will be able to receive the full payments on the 15th of each month. Families with children under six will get $300 cash payments and up to $250 for each child between the ages of six to 17. The credit is not eligible for 18-year-old dependents.

The credit is also fully refundable, and the $2,500 earned-income requirement has been eradicated.

The Internal Revenue Service determined child tax credit eligibility based on 2019 and 2020 tax returns, but families can update information like income marital status and the number of dependents through an online portal.

The agency is also setting up a portal for low-income households that don’t normally file taxes. The portal will allow them to claim the enhanced child tax credits, as well as any other pandemic-related relief that they might have missed, like the direct payments. In March 2020 when the virus first struck the U.S., a similar portal was created for low-income families to claim relief from the Cares Act.

Biden has also proposed an extension of the expanded child tax credit through 2025 as part of his $1.8 trillion American Families Plan, a measure that could roughly halve child poverty, according to experts.

“While the American Rescue Plan provides for this vital tax relief to hard working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come,” Biden said in a statement.

But some congressional Democrats say this effort falls short of the needs of American families, as they have pressured the Biden administration to make them permanent.

 

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.