After a dismal winter made darker by the COVID-19 pandemic, millions of American families are getting a little sunnier disposition thanks to advance payments of the Child Tax Credit.
Millions of the advance payments are now showing up as electronic deposits in checking accounts and mailed checks in mailboxes.
The Internal Revenue Service and the Treasury Department say the first batch of advance monthly payments was worth some $15 billion and went out to about 35 million families. The vast majority of that—roughly 86 percent—went out as direct deposits.
Advance payments of the Child Tax Credit were made possible by the American Rescue Plan (ARP). Under that new law, each monthly payment is up to $300 per month for each child below the age of 6, and up to $250 for each child age 6 through 17.
The payments will continue each month for the remainder of 2021, so anyone who receives a payment this month will get additional payments each month for the rest of the year unless they unenroll.
Beyond the first July 15 payment, additional payments are expected to go out Aug. 13, Sept. 15, Oct. 15, Nov. 15, and Dec. 15.
The Internal Revenue Service says families should keep a few things in mind when it comes to receiving advance CTC payments:
- Families will see the direct deposit payments in their accounts starting July 15. For those receiving payment by paper check, they should remember it may take longer to receive their payments by mail.
- Payments went to eligible families who filed 2019 or 2020 income tax returns.
- Tax returns processed by June 28 are reflected in these payments. This includes people who don’t typically file a return, but during 2020 successfully registered for Economic Impact Payments using the IRS Non-Filers tool or in 2021 successfully used the Non-Filer Sign-up Tool for Advance CTC, also on IRS.gov.
- Payments are automatic. Aside from filing a tax return, including a simplified return from the Non-Filer Sign-Up tool, families don’t have to do anything if they are eligible to receive monthly payments.
There’s still time for families to sign up for advance payments of the Child Tax Credit.
Those who normally aren’t required to file a tax return should take a look at the tools available on IRS.gov. These tools can help those individuals and families determine their eligibility for the advance credit payments, or to help them file a simple tax return in order to sign up for the payments.
Filing a return is also needed to receive an Economic Impact Payment (EIP) or other credits the family may be qualified to receive.
More information can be found on the IRS’ special Advance Child Tax Credit 2021 page. It has up-to-date information about both the credit and the advance payments.
MEA Tax Advisors