The IRS has officially announced the dates that it will be sending out the monthly advance payments as part of the expanded Child Tax Credit created by the American Rescue Plan. According to the IRS, eligible American families can expect to receive their first payment on July 15. Subsequent payments will be sent out on the 15th of each month through December, with the only exception being the payment slated for August that will be sent on the 13th of that month. According to the IRS, most eligible families will not need to take any additional action in order to begin receiving their payments.
The IRS has also begun to send out letters to the roughly 36 million American families that may be eligible for the payments. The IRS has also indicated that it plans to follow those letters up with personalized letters for each eligible family that will include estimates of what their monthly payments will look like.
These estimates are based on information contained in 2020 tax returns that are on file with the IRS, or on 2019 tax returns or information provided by non-filers using the Non-Filers tool on the IRS’ website when 2020 returns are not available.
In order to guarantee that these estimates and the payments themselves are correct, the IRS is encouraging those who have not yet filed their 2020 tax returns to do so as soon as possible. The IRS will also be opening up a pair of online portals that will help American families provide the IRS with updated information, including a portal designed specifically for those people who do not normally file a tax return. The portal will also allow people to notify the agency of important changes that are relevant to the Child Tax Credit payments, such as changes in income or child custody status as well as the number of children in the household. A separate portal will be available for those people who would prefer to receive a single lump payment during next year’s tax season as opposed to a combination of a lump sum along with monthly advance payments.
The Child Tax Credit has been expanded this year, with a number of important changes to both eligibility and the size of payments available. Whereas normally a $2,000 credit is available for children up to six years of age, this year the credit includes a payment of $3,600 for children under six and payments of $2,000 for those up to 17. Individuals making up to $75,000 will be eligible for the credit, as will heads of households and married couples filing jointly who make up to $112,500 and $150,000, respectively.
Eli Fuhrman is a contributing writer for The National Interest.