Millions of families across the country will receive the second monthly child tax later this week.
The money – included in the American Rescue Plan passed in March – expands the existing child tax credit to include children ages 17 and younger. The credit previously provided up to $2,000 per child. The change allows for up to $3,600 for children 5 and younger and $3,000 for those 6-17, payable in monthly installments. Families will receive monthly payments per child of up to $300 for six months of this year starting in July. The remaining half can be claimed in the form of a tax credit in 2021.
The expansion also made the child tax credit fully refundable, making it available to low- and middle-income families.
According to Washington, D.C.-based think tank The Niskanen Center, the payments will reach roughly 39 million households and 50 million children. The expansion will boost consumer spending by $27 billion, generating $1.9 billion in revenues from state and local taxes and support the equivalent of more than 500,000 full-time jobs at median wage, the center estimates.
This month’s payments will be made on Aug. 13, a change in the regular schedule due to the 15th falling on a Sunday. The remaining payments – September, October, November and December – will be made on the 15th of the month for those with direct deposit on file with the Internal Revenue Service.
To be eligible for full payments, single taxpayers must have adjusted gross income of up to $75,000. For married couples who file a joint tax return, full payments are for those who earn up to $150,000. People who earn more than the salary caps will receive a partial benefit, going down by $50 for every additional $1,000 of income.
High-income earners who aren’t eligible for the monthly payments can still claim the $2,000 per child tax credit, as long as their income is below $200,000 for single filers or $400,000 for married couples.
Opting out
Some people are opting to not receive the monthly payments – you can see some reasons here.
It’s too late to opt-out for August but here are the deadlines for stopping future payments. The deadline is 11:59 p.m. on each date:
- Aug. 30 for the Sept. 15 payment
- Oct. 4 for the Oct. 15 payment
- Nov. 1 for the Nov. 15 payment
- Nov. 29 for the Dec. 15 payment
For more information
The IRS has a separate site, the Child Tax Credit Update Portal, that allows people to change their number of dependents, direct deposit information or to cancel payments, you can go here.
If you need to submit deposit information, you can go here.
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