The $3,000 child tax credit will start paying out on July 15. Everything you need to know
Around 39 million American households are set to get their first monthly payment from the expanded $3,000 child tax credit starting on July 15. That's according to a joint statement on Monday by the Internal Revenue Service and Department of the Treasury.
In March, President Biden signed a massive $1.9 trillion economic aid package that upped the existing $2,000 child tax credit for the 2021 tax year to $3,000 per child ages 6 to 17, and $3,600 for children under the age of 6, with new income phaseouts. Up to half of the $3,000 or $3,600 expanded child tax credit can now be paid in periodic payments in 2021 through December, while the rest of the fully refundable credit would be incorporated in filers’ 2021 tax return next year.
The IRS and Treasury said that starting on July 15, eligible families will receive up to $300 per month for each child under age 6, or $250 per month for each child ages 6 to 17. Similar to the stimulus checks sent out in 2020 and 2021, these payments will begin "without any further action required" by the taxpayer, the agencies said. The payments will continue to be sent out on the 15th day of each month, so long as it doesn't fall on a holiday or weekend.
Taxpayers with direct-deposit information on file with the IRS will get their child tax credit payments via direct deposit. Everyone else will have payments mailed as either a paper check or a debit card.
The IRS will be setting up a portal that filers can use to update important information, like their number of dependents, as well as to opt out of the advanced payments if they prefer a lump sum with their 2021 tax return. Additionally, the IRS will reportedly set up a separate portal for those who don't normally file tax returns to provide the agency with information for the advanced payments. (The IRS hasn't publicly confirmed that it will set up that second portal; it was not able to respond to questions on the matter from Fortune before publication.)
Who qualifies for the $3,000 child tax credit?
The fully refundable expanded credit comes with new income qualifications. Single filers making up to $75,000 per year in modified adjusted gross income, heads of households making $112,500 or less a year, and couples filing together making up to $150,000 per year can qualify for the entire credit. For incomes higher than those levels, the payments will phase out by $50 for every $1,000 in income over the limit.
If you’re not eligible for the $3,000 credit, can you still get the $2,000 credit?
Families who are above those income levels can still qualify for the original $2,000 credit. For that credit, single filers making up to $200,000 of modified adjusted gross income and couples filing together making up to $400,000 can qualify for $2,000 per child.
Read more about the child tax credit here.
This story was originally featured on Fortune.com
