Parents with children who qualify for President Joe Biden's expanded child tax credit will begin to receive their monthly payments on July 15, the administration said Monday.
The Treasury Department and the Internal Revenue Service announced that roughly 39 million U.S. households — which house 88% of the children in the United States — will begin receiving monthly payments from the federal government with no strings attached. The payments are part of the newly advanceable child tax credit that was codified by Biden's $1.9 trillion COVID-19 stimulus package, "The American Rescue Plan."
Under Biden's plan, the maximum child tax credit in 2021 was increased to $3,600 for children under the age of 6 and to $3,000 per child for kids between 6 and 17. The tax credit, which will be paid monthly in advance instead of when families file their taxes, is expected to lift more than five million children out of poverty this year, according to the Biden administration.
Administration officials said starting in July the payments will be made on the 15th of each month unless the 15th falls on a weekend or holiday. Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6-17. Families who signed up to receive their tax returns via direct deposit can expect these payments to be directly deposited into their bank accounts as well.
"The American Rescue Plan is delivering critical tax relief to middle class and hard-pressed working families with children. With today's announcement, about 90% of families with children will get this new tax relief automatically, starting in July," President Joe Biden said in a statement.
The president called on Congress to extend the expanded child tax credit past 2021 by passing his "American Families Plan," a $1.8 trillion spending proposal to wage war on poverty.
"While the American Rescue Plan provides for this vital tax relief to hard working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come. For working families with children, this tax cut sends a clear message: help is here."
Biden's $1.8 trillion American Families Plan would, in addition to expanding the child tax credit through 2025, provide at least two years of free community college, provide free pre-K education, federally fund paid family and medical leave programs, and increase Obamacare subsidies. Democrats want to increase corporate and capital gains taxes to pay for the plan over the next 15 years.