IRS announces child tax credit of $300 a month

Last week, the Internal Revenue Service and the U.S. Treasury Department said they would be releasing the first monthly payment of the expanded child tax credit. This payment, a part of the $1.9 trillion coronavirus relief bill, will arrive on July 15. After that, monthly payments will be made from the 15^th of every month till the end of 2021. 39 million families are eligible for this child tax credit, a number that accounts for 88 percent of all children in the country.

Families are eligible for up to $300 in monthly payments for each child under 6. Families with children between the ages of 6 and 17 are eligible to receive monthly payments of $250. These funds are made available as part of the American Rescue Plan. Eligible families can get up to $3,600 for children under 6 and up to $3,000 for children between 6 and 17 years. This amount is known as the maximum Child Tax Credit (CTC). Any remaining credit can be claimed on your 2021 tax return.

Following the statement by the IRS, President Joe Biden said that Congress would have to pass the American Families Plan so that working families could also enjoy this vital tax relief. According to the IRS, these payments will cut child poverty in half by lifting over five million children out of poverty. 

Households will receive their payments by direct deposit, paper checks, or debit card. Singles with an adjusted gross income of up to $75,000 and married couples filing jointly who earn $1,50,000 will be eligible for the full amount. Then, the credit will go down by $50 for every $1,000 of additional income. The IRS has committed to carry out outreach programs to make sure families know the eligibility criterion and update their payment information accordingly.