Child tax credit payments hit bank accounts [Video]

WHAT YOU NEED TO KNOW:

• The first payment of a $1,000 child tax credit hit American families’ bank accounts on Thursday.
• More than 39 million families around the US benefit from the expanded eligibility pool as part of the $1.9 trillion coronavirus relief package that was passed in March.
• The first round of payments will total about $15 billion, according to a White House official.

Most eligible families in the U.S. get their first monthly payments of the expanded child tax credit on Thursday.

The payments, which were included in the American Rescue Plan, change an existing tax credit by expanding the eligibility pool and increasing the money families get.

“I think this is one of the things that the vice president and I will be most proud of when our terms are up,” President Joe Biden said in a speech at the White House on Thursday. “This can be life changing for so many families.”

The first round of payments will total about $15 billion, according to an administration official. That amount will likely increase in the months to come as more people sign up.

People who claim children 17 or younger as deductions on their taxes are eligible. The IRS determines the age of a child by how old the child is at the end of the 2021 calendar year. So children turning 18 this year will not be eligible.

There are no work requirements, and you do not need a permanent home to claim the credits.

Parents eligible for the full enhanced credit will get $300 a month per child under age 6 and $250 a month per child ages 6 to 17.

The payments max out at $3,600 annually for each child under 6 and $3,000 for those ages 6 to 17.

If you filed taxes in 2019 or 2020 or received a stimulus check, you should get a direct deposit. If the IRS does not have your current banking information, then keep an eye out for a check in the mail.

If you do not see a direct deposit payment Thursday, you can visit the Child Tax Credit Update Portal to see whether your information is up to date.

The IRS plans to send direct deposits on the 15th of each month, so: July 15, Aug. 13 (this payment is early because the 15th falls on a Sunday), Sept. 15, Oct. 15, Nov. 15 and Dec. 15.

If you do not want to get payments on a monthly basis and would prefer to get the cash in a lump sum during tax season, you can update that preference on the IRS website.

If you were not required to file taxes in 2019 or 2020 or did not do so, you must update your information with the IRS to receive the benefit.

The IRS released an online tool where parents can register their information electronically. The tool works well on a laptop or a desktop computer.

The expanded credit ends in December. Biden has called for a four-year extension, which would need congressional approval.

Source: NBC News