Monthly Child Tax Credit Payments To Start In July: Who Qualifies?

The IRS is set to distribute monthly child tax credit payments to eligible American families beginning in July, Commissioner Charles Rettig announced Tuesday during a hearing with the Senate Finance Committee.

The enhanced child tax credit was included in the $1.9 trillion American Rescue Plan that President Joe Biden’s signed into law in March. Under the measure, families will receive $3,600 per child under 6 and $3,000 per child ages 6 to 17 for the 2021 tax year.

The credit will also provide eligible families $500 for each child aged 17 and 18, or for full-time college students ages 19 and 24.

The IRS is expected to disburse the payments through December. The amounts families will receive each month will generally will be $250 for older children and $300 for children under age 6. The remaining half of the payments can be claimed when filing the 2021 tax return in 2022.

The child tax credit’s income threshold follows the same eligibility requirements for the third round of stimulus checks. Individuals who have children and are earning less than $75,000 a year or married couples filing jointly making below $150,000 will receive the full credit.

The child tax credit benefit will cease for individuals earning $95,000 and married couples making $170,000.

Taxpayers making above the income limit can still qualify for the regular child tax credit, which gives families $2,000 per child under age 17 for single parents making less than $200,000, or married couples earning $400,000 who file jointly.

During the Senate Finance Committee hearing on Tuesday, Rettig also announced that the agency was planning to roll out a new portal that would allow parents to sign up and get the child tax credit payment in advance.

"We will launch by July 1 with the absolute best product we are able to put together," Rettig said of the portal. "We are trying to get it as user-friendly as possible, but we will launch by July 1."

Rettig also said the IRS is prepared to delay rolling out the portal if it finds any technical issues that could lead to fraud.

"If we are not prepared, we will not launch. We're not going to risk our systems," he added.