Millions of Americans are getting a raise in a little more than three weeks from now.
That, essentially, is what the net effect will be of the new stimulus check series that’s already been approved and will be doled out on a monthly basis starting July 15 and running through the end of this year. Yes, yes, we know — none of us “works” for Uncle Sam, so it’s a little odd to call the money that will soon begin showing up in mailboxes and bank accounts a “raise,” but that’s what it will feel like, nonetheless. Millions of Americans — more than 36 million, to be exact, according to IRS estimates — will be allotted either $1,500 or $1,800 per child, depending on the age of the child. That amount will be broken up into $250 or $300 per month, with parents of kids under age 6 getting the higher amount ($300) and parents of kids ages 6-17 getting the $250/month. So, for example, if you have three kids under the age of 6, your monthly payment through December would be $900/month.
As a refresher, what we’re talking about here is an expansion of the federal child tax credit. It’s a benefit that was included in the $1.9 trillion stimulus legislation that President Biden signed back in March.
At the time, the included funding that made a third round of stimulus checks possible is what got the lion’s share of attention when that bill was passed. These new child tax credit payments, however, are going to far exceed those $1,400 stimulus checks.
We noted above that the payments will either be $1,500 or $1,800 per child, depending on the age of the child. But that’s only through December 31 of this year. Next year, parents are also going to get something else — a tax credit. What it amounts to is this: The full amount that parents are actually getting as a result of the expanded federal child tax credit is either $3,600 (for each child younger than age 6) or $3,000 for each child between age 6-17. Half of that money will be paid out this year, in the form of six monthly stimulus checks.
Parents are getting the rest next year as a tax credit, once they’ve filed their federal tax return.
If you’re a little confused about all this, don’t worry. The IRS announced just a few days ago that it’s begun sending out letters to more than 36 million American families, which encompasses more than 88% of children in the US. The letters are meant to let them know that the payments are coming, and when to expect them. This way, there presumably shouldn’t be guesswork involved beforehand about whether a family is eligible or not.
The letters are being sent to families who may be eligible “based on information they included in either their 2019 or 2020 federal income tax return or who used the Non-Filers tool on IRS.gov last year to register for an Economic Impact Payment,” the IRS explains. “Families who are eligible for advance Child Tax Credit payments will receive a second, personalized letter listing an estimate of their monthly payment, which begins July 15.”