Last Updated: March 21, 2022
Following the $1.9-trillion American Rescue Plan Biden signed recently, the Internal Revenue Service (IRS) is notifying that 36 million families are possibly eligible to get monthly Child Tax Credit (CTC) payments. The statement published by the IRS on June 7 adds that eligible families can expect to start receiving their CTC payments in July.
According to the statement, the letters will be sent to families that may be eligible based on the information in their 2019 or 2020 tax returns or those that registered for an Economic Impact Payment on IRS’s website last year.
Around 88% of households with children in the US will be eligible, according to the Treasury Department. To receive their payment, the family needs to have had its main home in the US for over 6 months.
Furthermore, to be eligible, the taxpayers’ adjusted gross income must be below the following thresholds:
- $75,000 for individual taxpayers
- $112,500 for the heads of a household
- $150,000 for married taxpayers filing jointly and widows/widowers
The CTC has been around for a while, but it has been improved by the American Rescue Plan—its 2021 value has been increased up to $3,600 per child, it’s refundable, and offers the option for periodic payments.
The American Rescue Plan is a COVID-19 relief bill signed on March 11. Besides improving the CTC, the bill includes plans for additional stimulus checks, as well as additional unemployment benefits and tax exemptions.
How Big Will the Payments Be?
Each household will receive a custom amount based on their monthly payments and 2019/2020 tax return. The amount will be listed in a second letter they will receive upon the confirmation of their eligibility.
For each child under 6, eligible families can receive up to $3,600, and for children from 6 to 17, the maximum is $3,000.
The payments are set to start rolling in from July 15, will continue being paid on the 15th of each month, and will finish on December 15. The amount from the first half of 2021 will be paid to CTC recipients as a lump sum when they file their taxes the following year.
Eligible households will soon receive their letters, and the rest will be taken care of by the IRS, provided that all taxes have been filed.