UP to 40million American families will be sent a monthly “stimulus check” worth up to $300 from TODAY as part of the child tax credit rollout.
Eligible households will see six payments enter their bank accounts before the end of the year.
Child tax credit payments have been extended from $2,000 to $3,600 as part of The American Rescue Plan.
Families with kids between the ages of six and 17 will receive up to $3,000.
And newborn babies can qualify for the full $3,600 as long as they are US citizens.
President Biden tweeted Thursday: “Today is a historic day for our country. Because beginning this morning, nearly all working families started receiving their first tax cut payment from the Child Tax Credit of up to $300 per child.”
But, not all American families will qualify as taxpayers earning $75,000 or less are eligible to claim the full amount, CBS reports.
Payments are reduced by $50 for every $1,000 above the threshold.
Single taxpayers earning above $95,000 and joint filers earning above $170,000 are not eligible to claim the extra payments.
The first payments will be sent from July 15 but it may take a couple of days for the cash to arrive in bank accounts.
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Mark Steber, chief tax information officer at Jackson Hewitt, told CBS: “I wouldn’t expect the money on July 15 — that’s when the IRS will release the funds. There will be some lag time for the money to hit your bank account.”
Families will receive their “checks” on the 15th day of each month – unless the date clashes with a public holiday.
Households will either receive the payment electronically or it will be sent on a paper check if families have not provided the IRS with their details.
Families can update their details on the Child Tax Credit Update portal if they need to add dependents to their tax returns.
There is the option to opt out of monthly payments if families wish to receive the money as one lump sum during next year’s tax season.
To help with the rollout, the IRS has launched a tool that’s designed to help low-income families who do not normally file tax returns.
You don’t have to file a tax return if you earn less than $12,200 a year as a single taxpayer or $24,400 as a married couple filing jointly.
The child tax credit extension is not permanent but Biden appears keen to keep the scheme in place until 2025.
The president said: “As I’ve said again and again: The people who really need a tax break in this country are working families.
“That’s why my Build Back Agenda will extend the expanded Child Tax Credit we passed under my American Rescue Plan.”