On July 15, the IRS will begin sending checks to about 36 million American families as part of the expanded Child Tax Credit.

The tax credit will provide up to $1,800 in cash to eligible families through December. However, there is a complication that may cause some families to forego the tax credit. 

President Joe Biden signed into law the enhanced Child Tax Credit (CTC) as part of the American Rescue Plan.

It expands the $2,000 credit taken annually when you file your taxes to up to $3,600 per child, with half the amount divided into six monthly payments from July through December and the rest claimed on your 2021 tax return.

The CTC was increased to $3,600 for each child under the age of 6 and $3,000 for each child between the ages of 6 and 17.

The credit previously excluded children who had turned 17 and had a cap of $2,000 per child.

In addition to having children who are 17 or younger by December 31, 2021, families will only qualify for the expanded credit if they fall below certain income thresholds:

  • For single taxpayers, $75,000 or less
  • For heads of household, $112,500 or less
  • In the case of married couples filing a joint return and qualified widows and widowers, $150,000 or less

Earlier this week, the IRS announced it had created a website that allows people to check whether they qualify for the benefit, known as the Child Tax Credit Eligibility Assistant.

To determine whether you'll receive the payments, you'll need either your 2020 or 2019 tax return (if you haven't yet filed for 2020). If individuals do not have a copy of their tax return, they may estimate their eligibility based on their W-2s or 1099s.

Child Tax Credit Eligibility Assistant isn't a registration tool - it only tells people if they are likely to qualify for the payments. 

Parents will receive the following payments:

  • Each child under 6 receives $300 per month
  • $250 per month for each child between the ages of 6 and 17

A qualifying family with two parents who file a joint tax return and have two children under 6 will receive $600 each month for six months, starting July 15 and ending December 15. During the period, they will receive $3,600 from the IRS for their two children.

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