Huzzah! Today is the long-awaited Child Tax Credit day. For the first time in modern American history, American parents across the country, up to a certain income, will receive monthly cash payments for the next six months to the tune of hundreds of dollars and then a fat tax cut at tax-filing time. So check your bank account, because you should be several hundred bucks richer right now.
The cash, which operates as a no-strings-attached cash payment, like a basic income for moms and dads across the country, is a nearly universal benefit — paid out in full to families making no money up to families making $150,000, and petering out fully by the time families hit the $400,000 income threshold.
Parents can expect to get several hundred bucks in their bank account, directly deposited, today.
Parents with kids age zero to six can expect a fat $300 bonus in their bank accounts, while parents with kids age 6 to up to 18 can expect a cash payment of up to $250. This is all, for the record, per kid, so families with multiple children can expect more money, which is truly awesome.
And, for families who qualify, at tax time, they’ll receive a hefty amount of cash for the rest of their tax credit payment. The only snag might be for parents who share custody of their children — as only one parent can get the credit.
If you filed taxes, you should receive the tax credit without having to do anything. If you did not file taxes, make sure you check out the IRS’s child Tax Credit Non-filer Sign-up Tool to get the money you are owed.
Some families may choose to receive all the money at once in 2022 — you can do so by going to the Child Tax Credit Update Portal and you can opt-out at any point for the rest of the monthly payments and opt-in to receiving the lump sum. Others may want to receive the cash monthly to help out with the costs of diapers, clothes, to put the money away in a 529 account, to pay down bills or a mortgage, or more.
The program, if fully utilized, could cut child poverty by half. And in the meantime, in a nation where 40 percent of people can’t afford a $400 emergency expense, it will do well to stabilize families economically and empower them to spend, or save, the cash where they need it most. Here’s what some parents are expecting to do with their monthly cash.
This is a rare example of the federal government stepping in to help working families. So enjoy it!