When will child tax credits worth up to $3,600 start going out? Here’s what we know

Enhanced child tax credit benefits will start hitting eligible families’ bank accounts in mid-July.

President Joe Biden’s administration announced Monday that the up-to-$3,600 per child benefits — included in the $1.9 trillion COVID-19 relief package signed into law in March — will start going out July 15.

How the child tax credit works

The temporarily enhanced credits will provide families with $3,600 per child under age 6 and $3,000 per child ages 6 to 17 in tax benefits over the course of a year. Single parents making up to $75,000 a year and couples making up to $150,000 a year are eligible for the full benefit. Benefits are phased out after that.

Eligible families will start receiving monthly payments of up to $300 on July 15 through the end of the year. The other half of the benefits can then be claimed on income taxes at the end of the year.

Eligibility for the benefits will be based on income status in 2020, The Washington Post reports.

Payments should go out on the 15th of each month unless it falls on a weekend or holiday.

President Joe Biden said that about 90% of families with children will receive the benefit automatically, with about 66 million children covered.

“The American Rescue Plan is delivering critical tax relief to middle class and hard-pressed working families with children,” Biden said in a statement.

The announcement falls on the deadline for Americans to file their 2020 tax returns. The Internal Revenue Service had urged families to file their taxes as early as possible to see if they’re eligible for the benefit.

It says filing electronically with direct deposit can “speed refunds and future advance CTC payments.”

Biden’s administration told reporters Sunday that it will create two online portals to help families receive the payments — one for those who usually don’t file tax returns and another for families to tell the IRS about changes in custodial status or to indicate they want to receive the full benefit at the end of the year instead of as monthly payments, The Washington Post reports.

Why it matters

The enhanced child tax credits are a boost from the current credit of up to $2,000 per child under age 17.

They’re also fully refundable, meaning low-income families can take advantage. Previously, credits were partially refundable, and millions of children weren’t covered because their parents made too little income, CNN reports.

A March analysis from the nonpartisan Center on Budget and Policy Priorities found the credits could lift 4.1 million children above the poverty line and cut the number of children living in poverty by 40%.

The American Rescue Plan expanded the child tax credit through 2021 only. But Biden has called for the increases to last through 2025 and for the credit to be “permanently fully refundable.”

He included the proposal in his sweeping $1.8 trillion American Families Plan, which was unveiled in April.

“In addition to making it easier for families to make ends meet, tax credits for working families have been shown to boost child academic and economic performance over time,” the White House said of the proposal.