Child Tax Credit 2021: how many families will receive the payment from July?
The IRS have confirmed that the monthly payments will be sent out from July, but how many American households will receive the support and for how long?
The White House has confirmed that payments for the reformed Child Tax Credit will begin from 15 July 2021, giving families a monthly direct payment worth up to $300 per child.
The American Rescue Plan provided federal funding for a complete overhaul of the programme, which President Biden is hoping to extend beyond its initial 12-month lifespan.
The IRS have announced that 39 million households will receive the direct payments over the next year. The programme is estimated to cover 88% of children in the United States, making a real difference to the lives of around 65 million children.
Monthly payments to 39 million households — covering 88% of children in the U.S. — will start going out on July 15th, thanks to the expanded Child Tax Credit (CTC).
— The White House (@WhiteHouse) May 17, 2021
That’s the American Rescue Plan at work.
Who will receive the new Child Tax Credit?
Although the new Child Tax Credit covers the vast majority of American families, not everyone will be entitled to receive the full amount. As was the case with the stimulus check payments, the amount on offer will gradually phase out for higher-income earners.
Individuals who earn more than $75,000, or married couples earning more than $150,000, will receive less money in their Child Tax Credit payment than households whose earnings are below those thresholds.
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Your entitlement will be based on the information provided to the IRS in your most recent tax returns, giving an extra incentive to get your returns filed if you have not already. If you do not submit your tax returns information you may find that your Child Tax Credit payments are delayed, or even that they do not arrive at all.
If you have had a change in circumstances (household income, marital status, number of child dependents, etc.) you may now be eligible for a larger entitlement, so it is vital that you update your tax information.
How long will the monthly Child Tax Credit payments last for?
For now, the federal government has only provided enough funding for a single year of the new-look Child Tax Credits but there are already plans in place to extend the programme far beyond. Biden’s American Families Plan would, if passed by Congress, see the direct payments continue until the end of 2025.
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However even this will not satisfy everyone and a number of Democratic lawmakers are calling for the programme to be made permanent. On Monday, shortly after Biden’s announcement, Speaker of the House Nancy Pelosi released a statement supporting a permanent extension for the new-look Child Tax Credit.
Are you a taxpayer? Do you have kids under 18? Then you are probably about to get a tax cut -- deposited directly into your bank account, each month, starting July 15 -- thanks to the American Rescue Plan.
— Ronald Klain (@WHCOS) May 18, 2021
How much? This tool will let you know.https://t.co/cklq1RTbZ3
She said: “We must make this lifeline permanent, which is why Congressional Democrats will continue to champion an expanded Child Tax Credit — because we can only Build Back Better by putting families first.”