FACT SHEET: Biden-Harris Administration Distributes First Monthly Payments of the Expanded Child Tax Credit
Today, tens of millions of American families will begin to see their first monthly Child Tax Credit payments. The Department of Treasury estimates that $15 billion were distributed today to tens of millions of working families with 60 million children. For the 86% of families using direct deposit, they will receive their child payment today, July 15th, and the 15th of every month for the rest of 2021. It will show up in their bank accounts described as “ChildCTC.” Others will receive their check in the mail today or in the coming days.
The American Rescue Plan is providing the largest-ever Child Tax Credit – increasing from $2,000 per child to $3,000 for each child between the ages of 6 and 17, and to $3,600 for each child under the age of 6. This historic increase will provide middle-class families with critical tax relief and will lift millions of children out of poverty.
Major Tax Cut for Middle Class Working Families: Nearly all middle-class families will receive the expanded child tax credit, to help them meet the costs of raising children with the security and dignity they deserve. And because monthly payments start today, they won’t have to wait until tax season for tax relief that millions of families need now.
- Full Payment for Most Families. All families will get the full Child Tax Credit if they make up to $150,000 for a married couple or $112,500 for a family with a single parent (also called Head of Household). Eligible families will receive monthly payments of the Child Tax Credit automatically if they filed taxes in the last two years.
- $7,200 for Typical Family with Young Children: For a married couple earning a combined $60,000 per year with two children under age 6, their Child Tax Credit will equal $7,200, providing an additional $3,200 tax cut in 2021 thanks to the expansion.
The first monthly Child Tax Credit ever: Today, four months after the American Rescue Plan was signed into law, tens of millions of families with nearly 60 million children are receiving the first-ever monthly payments of the Child Tax Credit. This reflects the swift implementation efforts of the White House, Treasury, and the IRS.
- $250-$300 a Month Per Child: Starting today, working families will receive monthly payments of $250 for each child ages 6 to 17 and $300 for each child under 6 years old.
- Helping Working Families Meet the Costs of Raising Children: Tens of millions of working families will be able to rely on these monthly payments to help with the costs of raising their children – from putting food on the table, to covering the costs of school supplies, new clothes, and unexpected expenses.
Over 97 percent of Families Receiving the 2021 Child Tax Credit are Working: The Treasury Department estimates that over 97 percent of families that will receive the expanded Child Tax Credit are working familieswith wages or self-employment income. And for the families that don’t have income, many of those are seniors taking care of grandchildren or people with serious disabilities and health issues.
More than 26 million Children from Hard-Pressed Families will now get a full Child Tax Credit: Treasury estimates that the hard-pressed low-income families of over 26 million children that previously would have gotten a smaller Child Tax Credit than families with higher earnings, will now receive the full expanded Child Tax Credit. Prior to the American Rescue Plan, researchers found that over half of Black and Hispanic children were in families ineligible for the full Child Tax Credit because of too little earnings.
A Historic Reduction in Child Poverty: The expanded Child Tax Credit is the main driver in experts’ projections that the American Rescue Plan could cut child poverty by around half. Even by the most conservative estimates, the Child Tax Credit alone is projected to reduce child poverty by a multiple of any previous year.
Administration-wide effort to help sign up additional children and their families:
- Simplified non-filer portal: The Child Tax Credit has been around for more than twenty years, but there has never been a tool to help non-filers claim the credit. Thanks to the implementation efforts of the White House, Treasury, and the IRS, the first-ever non-filer portal for the Child Tax Credit was launched by the IRS in June.
- ChildTaxCredit.gov: The White House launched ChildTaxCredit.gov – a one-stop-shop in English and Spanish for user-friendly information on the Child Tax Credit, including a step-by-step guide to using the non-filer portal in multiple languages.
- Working with Major Non-Profit Organizations and Community Groups that Fight for Children: For months, the White House has worked closely with children’s advocacy groups, women’s organizations, committed faith-based organizations, and other nonprofit organizations in an on-going collaborative effort to find the most effective strategies for signing-up families who aren’t receiving the credit, through creating awareness, developing navigator and trusted messenger sign-up strategies, and working to improve website accessibility.
Investment with a high return: Studies show that children whose families get more in refundable credits do better in school and score higher on standardized tests, are more likely to graduate high school and attend college, and make more money as adults. These children are also less likely to face the early onset of disabilities and health issues like diabetes that can represent key barriers to employment later in life. In fact, research from Columbia University shows that each $1 invested in the Child Tax Credit returns over $8 to society in improved health for children and their parents, better educational outcomes and higher future incomes, and reduced crime and criminal justice costs.
Extending the new Child Tax Credit for years to come: The American Rescue Plan’s expanded Child Tax Credit is only for 2021. This is a historic investment that will lift children and working families out of poverty. That’s why President Biden believes that we should extend the new Child Tax Credit for years and years to come. He is proposing that we do so in his American Families Plan and Build Back Better agenda.