Here’s what the new Child Tax Credit could mean for your family

Back in March, a stimulus package worth over $1.9 trillion was voted into effect, which included a child tax credit that will be enacted this week. Families and certain low-income workers will become eligible to receive up to $3,600—if they meet the criteria.

An income requirement must be met in order to receive a payment. This includes single parents who make up to $75,000 annually, heads of households earning up to $112,500, and joint filers making up to $150,000 will be eligible to receive.

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The Internal Revenue Service will also be basing incomes off 2020 tax returns (or 2019 returns if the 2020 one has not been done or processed yet), in order to determine who qualifies for the enhanced child tax credit. If you don’t file taxes, then the IRS has created an online portal to register in order to receive payments.

In May, the Biden administration announced that over 65 million children were set to receive the enhanced credit: monthly payments of up to $300 starting on July 15. According to CNN, this aid is set to cover 88% of the children in the US, and will be received through an automatic direct deposit or mailed as checks or debit cards.

Now through December, families will receive their funds on the 15th of each month (unless it falls on a holiday or weekend, which will move to the next business day). Parents who are eligible will receive either $300 a month for every child under the age of 6 and $250 for each child aged 6 to 17.

This is a major change compared to past years where the amount was lower. Since COVID-19 though, the Biden administration is hoping to help lift children above the poverty line. To continue supporting low-income families, this new tax credit is also fully refundable to encourage more low-income families to take advantage of it. Whereas in the past, it has only been partially refundable. The federal government also split the monthly payments for the whole year, so families will receive the first half until December, then will have the opportunity to claim the second portion on their 2021 tax returns.

For families that meet the criteria, be sure to check your mail and bank accounts starting July 15, as payments will begin rolling out.