The second monthly payment for the expanded child tax credit is set to be deposited into Americans’ bank accounts on Friday, providing parents with up to $300 per child for the month of August. The child tax credit has been expanded for 2021 to $3,600 for children aged 5 and under, and $3,000 for children between 6 and 17, with half of each credit being paid out in monthly installments from the IRS until December.
The remaining credit will be applied when families file tax returns next year. The monthly payments are available to eligible families with a modified adjusted gross income of less than $150,000 for joint filers, $112,500 for heads of households, and $75,000 for single filers. The enrollment process for low-income families is available through the IRS’s Non-Filer Sign-up Tool. The child tax credit monthly payment program is currently only available for 2021, but there is proposed legislation for its extension.
Who is eligible for the monthly child tax credit payments?
According to a congressional report, about 96% of American families with children are eligible for at least a portion of the 2021 child tax credit.
As long as your modified adjusted gross income, or MAGI, is less than $150,000 if you’re married and file jointly or $112,500 if you file as head of household, you’re eligible for the entire credit. Single filers with a MAGI under $75,000 are also eligible, although most single parents who qualify for the child tax credit should file as head of household.
After that, there are two stages of phaseouts for high-income families. First, your total credit is phased out by $50 for every $1,000 your MAGI is over the limit until it reaches $2,000. The next phaseout starts at a $200,000 MAGI for heads of household and $400,000 for joint filers. Above $240,000 and $440,000, respectively, families will not receive the child tax credit.
When will the August child tax credit payment be sent out?
The monthly payments are usually supposed to be deposited on the 15th of each month, but because Aug. 15 falls on a Sunday, this month’s money will become available Friday.
Some parents will start to see the money in their bank accounts before Aug. 13 if they’re receiving direct deposits. It’s not that the IRS is playing favorites — some banks and credit unions just process the payments more quickly.
Last month, mobile banking company Chime announced that its customers were able to access the money on July 14, and some users have already reported seeing their deposit pending for August. Customers of Netspend, a prepaid debit card company for people who don’t have a traditional bank account, have also said they received their deposit before July 15 last month.
If you don’t see your child’s tax credit deposit processing in your bank account five days after Aug. 13, you can request a payment trace from the IRS.
When will paper checks for the August payment arrive in the mail?
If you did not sign up for a direct deposit and are expecting a check to be sent through the mail, it’s not guaranteed that the money will land in your mailbox right on time. Last month, many parents found that their mailed checks weren’t scheduled to arrive until a week or even longer after the initial July 15 payment date. So if you don’t see anything on Friday, don’t panic just yet.
Parents can check the status of their child’s tax credit payments using the Child Tax Credit Update Portal (aka the CTC UP) on the IRS website. If you still haven’t received your payment after four weeks for a regular address, six for a forwarding address, and nine if it’s being sent to a foreign address, you can request a payment trace from the IRS.
Can low-income parents still sign up for the child tax credit?
While you can technically earn zero dollars and still receive the child tax credit, if you haven’t filed federal income taxes in the past two years due to your low-income status, you won’t get the monthly payments until you enroll using the IRS’s Non-Filer Sign-up Tool.
As Money reported earlier this month, the enrollment process can be challenging for many parents: The sign-up tool does not have a mobile format, making it hard to use for families who don’t have a computer at home. It’s also only available in English, although there is a 21-page guide on how to enroll available for Spanish speakers.
But if you’re in need of the money, taking the extra time to enroll can provide your family with the extra funds you need without losing access to other welfare programs like SNAP benefits (food stamps) and Medicaid.
Is the advance payment program still only for 2021?
Yes, although it could be extended in the near future.
The Biden administration has proposed legislation known as the American Families Plan, which includes an extension of the child tax credit monthly payment program, and Sens. Bernie Sanders, I-Vt., and Chuck Schumer, D-N.Y., have introduced a budget resolution to make it happen.
In conclusion
The expanded child tax credit for 2021 provides eligible American families with up to $300 per child in monthly payments until December, with the remaining credit applied during next year’s tax filing. The program is available to families with a modified adjusted gross income of less than $150,000 for joint filers, $112,500 for heads of household, and $75,000 for single filers. While some parents may have already received the August payment, the majority of direct deposit payments are set to be available on Friday, August 13. Low-income families who have not filed taxes in the past two years can still enroll through the IRS’s Non-Filer Sign-up Tool. The child tax credit monthly payment program is currently set to end after 2021, but there is proposed legislation to extend it.
FAQ
Who is eligible for the monthly child tax credit payments?
American families with children with a modified adjusted gross income under $150,000 (joint filers), $112,500 (head of household), and $75,000 (single filers) are eligible.
When will the August child tax credit payment be sent out?
The monthly payments are usually deposited on the 15th of each month, but the August payment will be deposited on Friday, August 13.
When will paper checks for the August payment arrive in the mail?
The arrival of mailed checks is not guaranteed, and parents can check the status of their payments using the Child Tax Credit Update Portal on the IRS website.
Can low-income parents still sign up for the child tax credit?
Low-income parents who have not filed federal income taxes in the past two years can enroll using the IRS’s Non-Filer Sign-up Tool.
Is the advance payment program still only for 2021?
Yes, but there is proposed legislation for an extension of the child tax credit monthly payment program.
What is the expanded child tax credit for 2021?
It provides eligible American families with up to $300 per child in monthly payments until December, with the remaining credit applied during next year’s tax filing.
What is the income limit for high-income families to receive the child tax credit?
The total credit is phased out by $50 for every $1,000 the modified adjusted gross income (MAGI) is over the limit until it reaches $2,000. The next phaseout starts at $200,000 MAGI for heads of household and $400,000 for joint filers.
How can eligible low-income families enroll in the child tax credit program?
Eligible low-income families can enroll using the IRS’s Non-Filer Sign-up Tool, although the process may be challenging for some families.
Can eligible families receive the child tax credit in addition to other welfare programs like SNAP benefits and Medicaid?
Yes, enrolling in the child tax credit program does not affect eligibility for other welfare programs.
What is the proposed legislation for an extension of the child tax credit monthly payment program?
The Biden administration’s American Families Plan includes the extension, and Sens. Bernie Sanders, I-Vt., and Chuck Schumer, D-N.Y., have introduced a budget resolution to make it happen.