When Will 2021 Child Tax Credit Hit Bank Accounts? July Due Date Isn’t Soon Enough For Most Americans

Last Updated on June 1, 2021

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The 2021 Child Tax Credit will start hitting eligible accounts beginning July 15, helping many American families and lifting millions of children out of poverty. The credit expansion is part of the American Rescue Plan Act, which is set to relieve families for the 2021 tax year only. Here’s what you need to know.

 

What Is The 2021 Child Tax Credit?

 

The child tax credit has been expanded as part of , Joe Biden’s $1.9 trillion American Rescue Plan Act, which was signed back in March. It will attempt to relieve families of mounting financial stress as Covid-19 and other economic factors continue push American households below the poverty line.

 

In a statement, Biden explained that “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.”

 

When Will Child Tax Credit Refunds Be Issued 2021?

 

The IRS plans to disperses child tax credits by July 15, to begin the transformation of the American economy and help families support their children. The checks will then arrive each month on the 15th unless the day falls on a weekend or holiday.

 

The first monthly payment will be sent to over 39 million U.S. households and will aid 88 percent of children in the country. The Child Tax Credit will then continue until December, with deposits sent directly to eligible accounts without any further action required.

 

Who’s Eligible For The 2021 Child Tax Credit?

 

The IRS is increasing credit amounts for all taxpayers with children and is also expanding the age range of those children eligible. Qualifying children will receive the funds as fully refundable. So any taxpayers, regardless of employment status, will receive the funds. Children ages 17 or under will receive the credit, even for children who turn 17 in 2021.


Parents will receive the payment for each child, and the IRS even 
raised the maximum benefits to $3,600 for kids under 6, and $3,000 for children ages 6-17.

 

How Much Will I Receive?

 

The tax credit is meant to raise children out of poverty. It is expected to succeed in its endeavor, lifting 5 million children above the poverty line, or nearly half of U.S. children.

 

The funds, which were previously set at $2,000 per qualifying child under 17, are being raised to a maximum of $3,600, with payments being delivered in segments each month, rather than in one lump sum at the end of the tax season.

 

Eligible families will receive up to $300 per month for children up to 6-years-old, and $250 a month for children 6 – 17, either through direct deposit, paper check, or debit cards. The IRS intends on delivering each payment quickly and securely to ensure no late payments or lost credit.

 

The Child Tax Credit amount reduces as family income increases, phasing out the credit for families making more money. For married taxpayers filing a joint return with over $150,000 in income, heads of households with $112,000, or all other taxpayers with $75,000 income will have reduced credit amounts or are cut off entirely depending on the amount.

 

The credit reduction occurs in increments, however, those making up to $200,000 are still eligible for the original $2,000 credit.

 

What If I Don’t Get Paid?

 

The IRS is launching two online portals by July 1. One will assist those not normally required to file an income tax return, providing vital information on their eligibility for the Child Tax Credit and how to receive payments.

The other portal will let families update their information in case things change throughout the tax credit distribution. This is useful for those who have a new child but it was not reflected on their 2020 tax return.

 

The portals can also be used to opt-out of the monthly payments, letting families decide to receive one lump sum in 2022.

 

File Your Taxes!

 

Payments are automatically sent for those who filed their tax returns by the May 17 deadline. Even non-filers who don’t usually submit tax returns are required to file a 2020 tax return to receive the child tax credit. The IRS needs to know how many children are in a household to send the proper funds.