On Thursday the Internal Revenue Service will begin delivering monthly installments of President Joe Biden‘s enhanced child tax credit to some 39 million American families.
The boost will see individuals who make under $75,000 and couples earning under $150,000 with children under six-years-old receive $3,600 per child, with monthly $300 checks starting to go out July 15.
The tax credits were part of the $1.9 trillion American Rescue Plan, which was passed by Congress in March with no Republican support.
Biden will hold an event at the White House Thursday to mark the first payments going out.
‘The president thought it was important to elevate this issue, to make sure people understand this is a benefit that will help them as we still work to recover from the pandemic and the economic downturn,’ press secretary Jen Psaki said at Wednesday’s briefing.
If those Americans have children between the ages of six and 17 they’ll receive a $3,000 tax credit, receiving $250 a month starting Thursday.
On Thursday, the Internal Revenue Service will start delivering payments of President Joe Biden’s enhanced child tax credit to some 39 million American families. Biden is pictured Tuesday speaking in Philadelphia, Pennsylvania
The American Rescue Plan, signed by President Joe Biden in March, allows child tax credits of up to $3,600 per year to be distributed in monthly payments instead of annually for children of couples who make under $150,000 annually or single parents earning up to $75,000
Individuals who make below $200,000 and couples making less than $400,000 are still eligible for the $2,000 child tax credit, the amount the credits were previously capped.
Parents will get half the credit they are eligible for in 2021, and will be able to claim the rest when completing this year’s federal tax return early next year.
Cash will automatically start hitting the bank accounts of families who have filed 2019 and 2020 federal taxes.
Eligible families previously reclaimed the tax credit back when filing their annual taxes.
The initiative is intended to run for a year and is intended to lift millions of children out of poverty.
Biden has spoken of extending it to 2025 and hopes it could be made permanent.
Families with a single ‘head of household’ being paid up to $112,500 a year are also included.
There is no limit on the number of children parents will receive cash for.
Vice President Kamala Harris hailed the enhanced program while visiting a recreation center in Pittsburgh, Pennsylvania last month.
‘When more families know about how they can get the relief, that is how we will be able to lift our children out of poverty,’ Harris said.
The White House released explainers on how the new child tax credit would work when it was rolled out last month
Sam and Lee, who are a married couple making $100,000, would be eligible to receive $3,600 for their two children under six-years-old
Alex and Casey make $350,000 meaning they make too much money for the enhanced child tax credit, but can still receive $2,000 for each of their two children
Tim and Theresa didn’t file taxes because their income is too low. They are, however, eligible for the child tax credit for their only child so they must use the IRS Non-filers sign-up tool to start receiving the monthly $300 payments
With the child tax credits, the administration launched a website with details for potential recipients.
The payments are to be made monthly, a first for the program.
People can register for the program even if they did not fully file their taxes.
Usually, tax breaks for Americans with kids and dependents come once a year, when individuals and families file their taxes.
‘This tax cut will give our nation’s hardworking families with children a little more breathing room when it comes to putting food on the table, paying the bills, and making ends meet,’ Biden said when rolling out the program last month.
‘Nearly every working family with children is going to feel this tax cut make a difference in their lives, and we need to spread the word so that all eligible families get the full credit,’ the president continued.
The program is slated to expire after one year, though Biden has proposed extending it through 2025 with the ultimate goal of making it permanent.
The child tax credit payments, which will reach millions of American households, including 88 per cent of children in the country, could have a lasting impact in reducing childhood poverty and boosting future earning potential a White House official said.
The expanded credits could cost roughly $100 billion a year.
Estimates from the IRS suggest that 39 million households accounting for nearly 9 in 10 U.S. children are already set to receive the payments.
More than 65 million children nationwide – nearly 88 per cent of Americans under 17 – are set to receive the benefits without their parents needing to take any additional action.
The IRS will determine eligibility based on the 2019 and 2020 tax years, but people will also be able to update their status through an online portal.