Like the stimulus checks that came before, the new and improved child tax credit is a win for parents. It makes the benefit, once a tax credit that parents could only access when they filed their taxes, a far more generous, fully refundable credit. It’s also — and perhaps most importantly — going to be paid out partially by monthly payments, making the credit a regular stream of cash, helping parents out monthly to the tune of hundreds of dollars a month, instead of just a tax-time payout.
The IRS promised a few weeks ago that the payments would start coming in July, and that they would be periodical, but until this point, it wasn’t clear if they would be monthly, bi-monthly, and when, exactly, they’d start coming out. But now we finally know when parents can expect to receive their first payments.
First, Make Sure You Check Your Mail
The IRS said on Monday that it has begun sending letters to the 36 million families who are likely eligible for the credit, which one analysis suggested could cut child poverty in half. The letters contain information on the child tax credit including the dates of disbursement via direct deposit and paper check.
Here Are The Dates The Child Tax Credit Payments Should Hit Your Bank Accounts
- July 15
- August 13
- September 15
- October 15
- November 15
- December 15
In case you are wondering why August 13 is randomly on the list, August 15 is a Sunday, so the IRS moved the payment date that month to the closest weekday before the 15th.
As A Reminder, Here’s Who Is Eligible for the Child Tax Credit Payments
Single filers making up to $75,000 per year, heads of household making up to $112,500, and dual filers making up to $150,000 are eligible for the full benefit of $3,600 per year (for dependents under six) and $3,000 (for dependents six to 17 years old). The total amount of the benefit decreases by $50 for every $1,000 in adjusted gross income above these thresholds.
The IRS will use 2020 tax information to calculate the credit unless it has yet to be filed or processed, in which case 2019 data will be used.
One of the compromises in the American Rescue Plan Act—besides the fact that this tax credit is only guaranteed for the 2021 tax year—is that half the credit is to be paid at tax time while the other half can be sent out in monthly installments. So some simple arithmetic tells us that, given that there are six payment dates instead of the 12 in a full year, each payment will be worth up to $300 for younger kids and $250 for older kids.
Families will receive a second, personalized letter with an estimate of their monthly payment in the coming weeks. The IRS will also add two new tools to its child tax payment website: an eligibility tool to help families determine whether they qualify for Advance Child Tax Credit payments and the long-promised portal that will allow people to opt-out of the advance monthly payments.