(WETM) – The Biden administration is beginning to distribute expanded child tax credit payments, giving parents on average $423 this month, with payments continuing through the end of the year.
President Joe Biden increased the size of the tax credit as part of his $1.9 trillion coronavirus relief package, as well as making it fully available to families without any tax obligations. The benefit is set to expire after a year, but Biden is pushing for it to be extended through 2025 and ultimately made permanent.
“It’s historic. It is our effort to make another giant step toward ending child poverty in America,” President Biden said Thursday.
The credit is $3,600 annually for children under age 6 and $3,000 for children ages 6 to 17. But six months of payments will be advanced on a monthly basis through the end of the year. This means eligible families will receive $300 monthly for each child under 6 and $250 per child older than that.
“It to be deposited into your bank account if you pay taxes normally,” Kamala Keeley, CEO Chemung County Chamber of Commerce, said.
These payments happen every year, but usually in smaller amounts. This year’s expanded tax credit is part of the American Rescue Plan, the Biden Administration’s multi-trillion dollar infrastructure package. The amount you receive is based on how old your child will be at the end of 2021.
“If your child at the end of this year is 18 years old, you won’t get anything,” Dr. Martin Cantor, an economist on Long Island, told 18 News.
It is a decision to receive it now or later. If you opted in to the program, the payments will roll out monthly until December 15, 2021. If you opted out, you will receive all of the money with your 2021 tax return.
If you filed taxes and the IRS already has your bank account information, the payments should be deposited directly into your account on the 15th of each month. The Treasury Department estimates that 35.2 million families will receive payments in July. If you didn’t file taxes in 2019 or 2020, you might still be eligible for the credit and can apply here.
“If you expect a certain amount of money when you file your tax returns and you receive a credit during the year, expect only half of the credit on your tax returns,” Dr. Cantor added.
Deposits began going out July 15, so not all checks have been received. If you did not sign up for a direct deposit, you may have to wait for your check to come via mail.
“It could take longer received a paper check, which is what we’ve seen with other relief checks that were coming to individuals,” Keeley said.
Deciding when to receive the money can be a difficult decision, but experts recommend looking at your 2020 return. If the tax credit money was used to offset paying tax, it may be better to not receive the payments, according to Dr. Cantor.
“If your childcare credit was a big part of your refund, then you’re not going to get that big refund at the end when you file your 2021 return because you are receiving half of it during the year,” Dr. Cantor concluded.
For more information, on the tax credit, visit the White House website or the IRS online.