Last month, many households throughout the country started to see the first of some monthly Child Tax Credit payments begin to show up in their accounts.
The payments started arriving on July 15. The second of the series was then mailed out a month later on August 13.
In total, the IRS has sent out over $30 billion to families across the country. Eighty percent of which were distributed via direct deposit. The checks will continue to arrive for the families who opted for the payments until the end of 2021.
The last three checks of the year are scheduled to go out on September, 15, October 15, November 15, and December 15.
Child Tax Credit Works To Stimulate Spending
The Child Tax Credit payments are part of an effort to bring money into households that may otherwise be struggling. They work similarly to the stimulus checks sent to families by the government during the COVID-19 pandemic. The Child Tax Credit checks are adjusted depending on the age of the child; as well as how much a household makes.
Single parents, or those who claim single with dependents on their tax return who make a total income of$75,000 or less per year, qualify for the full Child Tax Credit. The amount received for each child is $300 for children under the age of five; and $250 for children six years old and to seventeen years.
However, those who claim dependents on their taxes that make more than $75,000 a year will receive a reduced monthly Child Tax Credit amount.
These families will see checks that are reduced by $50 for every $1,000 they earn over the $75,000.
For those couples who are filing jointly, families whose joint income is at or below $150,000 per year qualify for the Child Tax Credit full monthly payment of $300 for children five years old and under; and $250 for dependents ages six years to seventeen-years-old. Those who earn more than the $150,000 cap will see the same reduction.
$50 per $1,000 over the cap – in each monthly payment.
Households Have the Option to Opt Out
Of course, parents and those with dependents had the option of opting out of these monthly payments. Some wish to receive the entire amount in a lump sum as the 2021 tax returns are mailed out next spring. Others may be uncertain as to whether or not they still qualify for the payments.
Some households may have experienced an increase in income. Therefore altering the amount the family is due to receive from the Child Tax Credit.
If a family decides that receiving the monthly checks is no longer their best option, they have time to opt out of the payments each month. However, there is a time limit to this. Each request must be made through the Child Tax Credit Update Portal. The request must be received at least two weeks before the scheduled date of the Child Tax Credit check.