The IRS says 88% of families will receive a bigger child tax credit. How much will you get?
The vast majority of American families with children will automatically receive up to $300 per month per child beginning July 15, the IRS and Treasury Department announced Monday.
On the same delayed deadline day for Americans to file their taxes, the IRS said families who qualify for the Child Tax Credit, which was expanded as part of President Joe Biden's $1.9 trillion American Rescue Plan, will receive monthly payments without taking any further action. Initial eligibility will be based on 2019 or 2020 tax returns.
The changes increased the child tax credit from $2,000 to $3,000 for children over 6, and to $3,600 for children under 6. (You can find out what benefits your family is eligible for with this COVID-19 relief calculator.)
As people send in returns, Biden announced in White House remarks, "they should know a new tax cut will be coming their way."
Biden said that the change is part of his belief that the tax system "should work for the middle class."
"That's why I think we should ask corporations and the top 1% to start paying their fair share, and why we should crack down on millionaires and billionaires who escape taxes by cheating," Biden said. "But I also think we need to give ordinary families a break, a tax break, to help them with the cost of raising their kids."
Earlier, he pressed Congress to keep the enhanced tax credit, which is only applicable for 2021 taxes.
"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. 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," Biden said. "For working families with children, this tax cut sends a clear message: help is here."
On a call with reporters, senior Biden administration officials said that 39 million households covering 65.25 million children will automatically receive the monthly payments via direct deposit, paper checks or debit cards.
Direct payments be made on the 15th each month for the rest of 2021, sliding a day before or after if it falls on a holiday or weekend.
Along with the increased amount, one remarkable change is that the credit is now refundable, meaning families get checks throughout the year, rather than waiting until after filing taxes. Biden praised that change during remarks Monday.
"Here's the great news: you won't have to wait until your next year's tax return to get that break," Biden said. "I'm announcing today that, on July 15th and the 15th of every month thereafter, throughout the year, you will get deposited in your bank account half of your tax cut at least, $250 per child each month, a direct deposit into your account."
Proponents of the expanded tax credit hail that aspect of the credit and the effects it could have on children in poverty.
A report published in March by the nonpartisan think tank, Center on Budget and Policy Priorities the expanded credit would "lift 9.9 million children above or closer to the poverty line including 4.1 million Latino children, 2.3 million Black children, and 441,000 Asian American children."
ABC News' Allison Pecorin contributed to this report.
