American families eligible for the expanded child tax credit will see the first check payment on their bank accounts beginning July 15. The pandemic stimulus package under the American Rescue Plan to help U.S. households recover from the global crisis will be distributed every month until December 2021.
Under this new scheme, eligible families may receive up to $250 to $300 a month, for the next six months, for every dependent until 17 years old. However, this new process is only half of the money that will go to families every month.
According to reports, the rest of the money will be rolled out during tax season in the spring of 2022. Some 39 million U.S. households, covering 88 percent of children, will receive the new child tax credit benefits automatically on their enrolled bank accounts with the Internal Revenue Service (IRS).
What Makes This New Scheme Better
This expanded scheme differs from the previous child tax credit, where taxpayers usually get a maximum of $2,000 a year for dependents under 17 years old. In the revised plan, the amount paid per child has increased to $3,000 (6 to 17 years old children) or $3,600 (children below six years old), and there are no limits to the number of children to be covered per credit and family. The new scheme also covers college-age dependents (18 to 24 years old) for a one-off $500 payment.
Families with an income below $75,000 (single filer), $112,500 (head of the household filer), or $150,000 (joint filers) during the pandemic year may also get the full value of this expanded credit. The biggest change to this revised benefit is the monthly distribution that guarantees families a regular stipend from the government.
Taxpayers may compute how much they should expect to get via the IRS online tool. The government agency will send the monthly stimulus check to taxpayers who filed in 2019 or 2020, and they won't have to do anything else since their records with IRS are updated.
Parents who did not file their taxes may still be eligible to get the benefit by using the non-filer tool on the IRS website. However, families may also opt out of the monthly payments, in favor of lump-sum payments in 2022, and change their preference on the IRS portal before the next rollout in August.
Efforts to Retain Expanded Scheme
Meanwhile, some members of Congress are planning ways to retain the expanded child tax credit scheme permanently since the coverage is up to the 2022 financial year only. According to Rep. Paul Tonko, D-Albany, the U.S. can rebuild a stronger economy post-pandemic by "building strong households." He believes that it's essential to invest in this revised scheme.
Related Article: Expanded Child Tax Credit Includes Babies Born or Adopted This Year
Dr. Leigh Wedenoja, an analyst at the Rockefeller Institute of Government, said that the monthly payments introduced in this expanded scheme are a big help to families. It prevents situations like eviction or defaulting on bills.
Experts predicted that the new child tax credit benefit would reduce childhood poverty across the U.S. by 50 percent. Eligible families should have received a letter from the IRS months before the rollout.
