Less than two months from now, millions of Americans will start receiving monthly checks from the federal government that add up to their biggest stimulus payment so far during the pandemic.
The new stimulus checks will be a bit different in form than previous payments, with the first three stimulus checks (for $1,200, $600, and $1,400) representing one-time, one-off checks from Uncle Sam. This time around, starting July 15, the single payment will be split up into monthly checks, generally arriving each month for eligible families on the 15th. The payments are a byproduct of the $1.9 trillion American Rescue Plan that President Biden signed into law in early March, legislation that included an expansion of the federal child tax credit. That’s what these payments represent — monthly tranches adding up to the total child tax credit that Biden’s stimulus law makes possible.
These new stimulus payments — which will generally provide families with $3,000 or $3,600 payments over the course of a year for each eligible child, depending on that child’s age — arguably represent one of the most significant domestic achievements of the Biden presidency thus far, separate from the response to the coronavirus pandemic. Here’s a closer look at what the payments entail:
The IRS explained by way of a reminder that for tax year 2021, families claiming the newly expanded federal child tax credit will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. They will receive $3,600 per qualifying child under age 6. Those payments work out to either $250 per month or $300 each month, and they will start arriving on July 15.
The Treasury Department estimates that around 39 million households, which covers some 88% of the country, will start receiving these checks in July — and, even better, without any proactive action needing to be taken on the part of the recipients.
According to the announcement from the Treasury Department, these payments will be made on the 15th of each month, starting July 15, unless the 15th falls on a weekend or holiday. This will allow “families who receive the credit by direct deposit to plan their budget around receipt of the benefit.” The Treasury Department goes on to note that “Households covering more than 65 million children will receive the monthly (child tax credit) payments through direct deposit, paper check, or debit cards, and Treasury and the IRS are committed to maximizing the use of direct deposit to ensure fast and secure delivery.
“While most taxpayers will not be required to take any action to receive their payments, Treasury and the IRS will continue outreach efforts with partner organizations over the coming months to make more families aware of their eligibility.”
One caveat to these details about the new stimulus payments: The increased amounts are reduced and phased out for families with incomes over $150,000 — for married taxpayers filing a joint return and qualifying widows or widowers — $112,500 for heads of household, and $75,000 for all other taxpayers.