Parents, prepare yourselves: The Internal Revenue Service (IRS) will begin sending out monthly payments for the child tax credit in July. I know. The government is actually acknowledging parents! With money! Amazeballs.
Before we get too excited here, let us acknowledge that $3,000 does not cover two months of quality daycare in some cities. Children cost a small fortune. But it’s something. Here are the details:
- Amount: Up to $250 per month will be sent for children ages 6 to 17, and up to $300 per month for children under age 6.
- Who gets it? Individuals with adjusted gross incomes (AGI) of under $75,000 or $150,000 for married couples filing jointly will receive the full amount.
- How is it paid? In monthly deposits or checks beginning in July. They are technically advances on a tax credit for 2021.
- What about families with lots of kids? Windfall. There’s no limit on number of children.
- Who doesn’t get it? People with AGIs over $95,000 or $170,000 for married couples. But the regular child tax credit of $2,000 per child under age 17 is still claimable for people with incomes up to $200,000 per individual or $400,000 for married couples.
The $1.9 trillion American Rescue Plan, which created the credit, was notably vague on how and how frequently the payments would be made, and before yesterday, the IRS had not committed to a start date. Charles Rettig, commissioner of the IRS, broke the news in a Senate Finance Committee hearing on Tuesday that July is the month. Parents can then claim the missed January to June 2021 payments (up to $1,500 to $1,800 per kid) on their 2021 tax returns.
The already-uber-popular credit program will continue only through December, though Congress is under heavy pressure to renew it.