If you are a parent, make sure to keep an eye on your bank account starting on July 15. On Monday, the Treasury Department announced that 39 million families across the nation will receive monthly payments in mid-July.
Nearly 88 percent of parents with children under a certain age will be eligible to receive benefits thanks to President Joe Biden’s $1.9 trillion coronavirus relief package. Parents don’t need to do anything special to receive the payments. The child tax credit is also being expanded for one year. This tax credit was capped at $2000 before and was only paid out to families after they filed with the IRS.
Families that qualify for the monthly child payments will receive up to $250 a month for each child between the ages of 6 and 17, and $300 a month for children under the age of 6.
Eligibility for the payments will be determined based on the 2019 and 2020 tax years. Only couples who earn $150,000 or less can receive the full payments. The cap for individuals is $75,000 and will phase out for those who make more than those amounts. If a married couple earns $170,000 while filing jointly or if an individual earns $95,000, the payments will cease.
Those who don’t qualify for the monthly payments may still qualify for the regular child tax credit, which is $2000 per child under the age of 17 for families that make less than $200,000 or married couples who make more than $400,000.
If you meet the income guidelines, you don’t need to do anything right now in order to receive the monthly payments. The IRS will use the information filed on 2020 tax returns.
If you haven’t filed your 2020 taxes, the IRS will then use your 2019 information instead. They are also working to make a portal for people who do not file so they can submit their information and receive the payments. In addition, taxpayers will soon have the ability to submit other changes to the IRS, such as whether you have a new child during the current tax year or if there is a change in custody.
The method used to send your payment will be based on the information the IRS has already. If they have your direct deposit information on file, that is how you will receive your credit. Otherwise, the IRS will be sending out debit cards or paper checks.