On Thursday, the federal government transferred the first of several new massive piles of money from its coffers to the bank accounts of tens of millions of Americans. New IRS stimulus checks — for as much as $300 per eligible child — were sent to qualified families as part of an expansion of the federal child tax credit. And the tax agency has already shared some big updates about how much money, exactly, was sent out, as well as who received it.
All told, this new wave of stimulus checks sent out Thursday totaled around $15 billion. Of that amount, about 86% was distributed to recipients electronically, in the form of a banking direct deposit. What that means, among other things, is that anyone who was eligible to receive one of these new checks — and who didn’t receive it on Thursday — will need to wait a few more days. As it’s likely to be on its way in the form of a paper check, in the mail.
More IRS stimulus checks coming soon
All told, an estimated 35 million American families got this first of what will eventually be six new monthly stimulus checks. There will be one each month, through December.
The IRS also shared the following important details to note on Thursday about this first wave:
- The direct deposit payments should be sitting in the recipient bank accounts already. Paper checks, obviously, will need another couple of days or so to arrive in the mail.
- Payments were sent to eligible families who filed 2019 or 2020 income tax returns.
- These IRS stimulus payments are automatic. Taxpaying families don’t have to do anything if they are eligible to receive the payments.
Speaking of eligibility, there’s really no complexity there. The checks depend on how many (and the ages of) children living in a household.
Per the provisions of the $1.9 trillion stimulus legislation from March, the IRS noted in a Thursday recap, “each payment is up to $300 per month for each child under age 6.” While, alternatively, the payments will be for up to $250 per month for each child ages 6 through 17. “Normally,” the IRS press release continues, “anyone who receives a payment this month will also receive a payment each month for the rest of 2021 unless they un-enroll.
“Besides the July 15 payment, payment dates are August 13, September 15, October 15, November 15, and December 15.”
Other points to know
That point about un-enrolling from receiving the six monthly checks is important, and you can read more via our previous coverage here. Basically, don’t think of these IRS stimulus checks the same way you thought about the previous three. These new stimulus checks are actually advance payments of a tax credit.
The stimulus law we referred to above actually expanded the existing federal child tax credit for families. Normally, that amount maximum is $2,000. However, the stimulus bill kicked that up to $3,600 for each child under age 6 in a household. It’s $3,000 for each child between age 6 and 17.
The government is holding on to half of whatever your amount is, and you’ll get that half next year when you file your taxes. The other half of that credit is being paid in advance. That’s what these six checks are.
Bottom line: If you normally skate close to the line, come tax time — either you end up owing no federal taxes but you also get no refund, or if you do usually end up owing money — you might want to consider un-enrolling here. Don’t worry, though. Instead of six checks, plus the tax credit next year, this just means you’ll get one all-encompassing payment next year.