The promised monthly child tax credit payments should have started hitting bank accounts on July 15, with more to come. Advocates say the checks worth $250 or $300 per child will help financially strained and struggling families.
When President Joe Biden signed the $1.9 trillion American Rescue Plan earlier this year, it increased the child tax credit so families will get a $3,600 credit in 2021 for children younger than age 6 and $3,000 per child age 6 to 17. This replaces the previous $2,000 credit that ended once a child turned 17, Foster’s Daily Democrat reported.
The child tax credit plan will distribute half of the credit directly to families earning up to $150,000 via monthly payments over six months.
“I see this as a form of economic equality for parents of color and parents who live below or near the poverty line,” said Clifton West, executive director of Black Lives Matter Seacoast. “This past year was probably the toughest financial year that we had in our house. I know that having a buffer will help my family tremendously, and allow my wife to go back to work soon.”
Here are three things Black America needs to know about the new 2021 child tax credit and how to claim it.
Taxpayers are eligible who claim children age 17 or younger as deductions on their taxes.
Parents with kids under 18 who earn up to $75,000 and couples filing their tax returns jointly who earn up to $150,000 will receive the full $3,600 credit per child under the age of 6 and $3,000 per child ages 6 to 17, according to the IRS.
Families will receive part of the credit in 2021 through advance payments of up to $250 per month for each qualifying child age 6 to 17 at the end of 2021 or $300 per month for each qualifying child under age 6 at the end of 2021.
The tax credit is fully tax-exempt.
The IRS has automatically enrolled families based on their 2019 or 2020 tax return, or information entered into the non-filer tool on IRS.gov in 2020 when people registered for their economic impact payments.
If families did not file taxes in 2019 or 2020 or did not register for economic impact payments last year, they can still sign up through the IRS website using the non-filer sign-up online tool. The tool works best on a laptop or a desktop, and is currently available only in English, NBC News reported.
If you didn’t receive a direct deposit payment on July 15, you can visit the Child Tax Credit Update Portal to see whether your information is up to date.
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The IRS plans to send direct deposits on the 15th of each month — July 15, Aug. 13 (early since the 15th falls on a Sunday), Sept. 15, Oct. 15, Nov. 15, and Dec. 15.