Back in March, Congress passed a massive aid package—to the tune of $1.9 trillion—which for one year upped the child tax credit from $2,000 to $3,000 per dependent ages 6 to 17, and to $3,600 per dependent ages 5 or younger. The package stipulated that up to half of the funds could be distributed this year in the form of monthly payments. On July 15, the first of those monthly child tax credit advances will begin going out to eligible households.
To help Americans determine if they’ll receive an advance, the IRS recently launched an interactive tool. If taxpayers answer a few questions, the tool will tell them if they’re likely to get an advance payment.
“This new tool provides an important first step to help people understand if they qualify for the child tax credit, which is especially important for those who don’t normally file a tax return,” IRS Commissioner Chuck Rettig said in a statement last week.
Who is eligible? Single filers earning $75,000 or less per year in modified adjusted gross income and couples filing jointly earning $150,000 or less per year can qualify for the full child tax credit for each of their dependents. Taxpayers earning above those levels will gradually see their payments phase out. For more information on phaseouts, check out this Coins2Day guide.
On July 15, the first of the monthly payments will begin to be distributed. Eligible taxpayers will receive up to $300 per month this year for each child age 5 or under, or $250 per month for each child between the ages of 6 and 17. Similar to stimulus check payments, these distributions will be deposited directly into the bank accounts of eligible taxpayers who have their account information on file with the IRS. The rest of eligible taxpayers will either get it via a mailed paper check or debit card.
If the IRS internal records show a taxpayer is eligible, that taxpayer will automatically be enrolled to receive the monthly advances starting on July 15. However, taxpayers can opt out of the monthly advances—and instead receive the lump sum in their 2022 tax return. They can opt out here.