On July 15, the first of six advance monthly installments of the increased federal child tax credit will be sent to 39 million American households.
Parents To Receive Their Monthly Child Tax Credit
In a recently published article in Indy Star, as part of the new federal legislation, starting July 15, parents will be entitled to a new monthly child tax credit for each kid. The monthly payments are linked to income taxes and are known as advanced payments.
Because the final day to modify the option for the July disbursement was on June 28, if a family has not yet unenrolled for the advance monthly payments, they will get one this month through direct deposit or paper check.
However, families may still notify the IRS not to make the payments moving forward. It means that they will not receive the money for the remaining five months until the end of the year, according to a report published in CNBC.
How Much Does Each Child Receive?
The maximum amount of the child tax credit for 2021 has been raised by Biden's coronavirus relief legislation. Children under the age of 6 will receive up to $3,600 and children ages 6 through 17 will get $3,000.
It is also worth noting that married couples earning up to $150,000 and single parents earning up to $112,500 using the head-of-household filing status are both eligible for the full enhanced credit amounts, according to a published report in The Hill.
Meanwhile, the credit will be accessible to all low-income families, and the IRS has been ordered to establish an advanced payment scheme. The agency will begin making monthly payments on the credit on Thursday and will do so on or around the 15th of each month until the end of the year.
Furthermore, children under the age of six will receive $300 per month, while older children will have $250. Families will usually get half of their credit amount for 2021 in monthly installments this year. They will obtain the remainder when they submit their tax returns the following year.
Biden Administration Wants to Make the Child Tax Credit Permanent
The Biden administration has suggested making it permanent and expanding the credit increase until 2025. Many Democrats in Congress have shown interest in making the child tax credit increase permanent.
Senate Majority Leader Charles Schumer (D-N.Y.) stated last week at a news conference in New York City that he expects the increased credit to be extended and that they will study if they can achieve the permanency that they are seeking.
The White House and Democratic legislators want to include the credit extension in a broader social spending plan that might pass Congress via the budget reconciliation process with just Democratic votes.
Obstacles Democrats May Face in Making It Permanent
Democrats will have to decide if and how they would pay for the credit extension. Biden's proposed extension of the credit, according to the Treasury Department, would cost more than $400 billion over 10 years. It would be much more costly to make the higher credit levels permanent.
The administration has suggested raising taxes on the wealthy people and established businesses to fund its economic plans, but several Democratic legislators have expressed reservations about some elements of the planned tax increases.
