July 27, 2021 | Priya Elangovan

The first monthly payments from the expanded child tax credit (CTC) in American Rescue Plan went out this month. Have questions about why you just received money? Check out our recap of the expanded child tax credit. You can also use the information below to help people in your community claim the benefit.

What is the impact of the CTC expansion?

Studies estimate the expanded CTC could cut child poverty by up to 50%, but only if all eligible families claim their benefits. Do your part by helping your community check their eligibility and sign up for benefits!

Approximately 10 million children are living in poverty, and about 7 million of them live in households that do not file taxes. Households that do not file taxes are at risk for not receiving the benefits they are eligible for. So far, the IRS has said the households of 60 million children have already received their payments. The expansion expires after one year. Congressional democrats have included a permanent expansion of the CTC in their budget bill for next year.

What are the Child Tax Credits?

The Child Tax Credit was first enacted in 1997 and was expanded in 2021 for one-year by the American Rescue Plan. Before this year, eligible families would receive $2000 per child under the age of 17 in their tax returns. Under the new expansion, parents are eligible for $3600 per child below the age of 6 and $3000 per child between 6 and 17. 

For this year, half of the CTC will pay out in monthly installments from July through December via check or direct deposit. The CTC should arrive in the same method that your COVID stimulus payments did. The monthly payments are $300 per child below the age of 6 and $250 per child aged 6 to 17. The rest of the credit will come in your tax return in April 2022. There is also an extra one-time credit for 18 year old dependents, and for 19-24 year old dependents that are full time college students.

Table with a breakdown of child tax credit payments by age

Who Gets the Child Tax Credits?

Before the expansion, Americans without incomes, or with very low incomes, did not get the CTC. Restrictions were suspended in the stimulus bill, making all families eligible. There are concerns that families who haven’t filed taxes, or who have out-of-date records with the IRS, will have trouble getting payments. 

You can check eligibility, manage payments, or enter your information if you are a non-filer at irs.gov. The website is currently available in English and Spanish. You can also use this website to track your monthly payment. If you have a child after the payments have started, you are still eligible for the credit.

The payments start to phase out at incomes above $75,000 for single filers, incomes above $112,500 for heads of households and incomes above $150,000 for married couples. People whose income changes between thresholds before their income tax filing may have to pay back the difference. Check out an FAQ on the CTC from the Washington Post to learn more.

Households can also choose to opt-out of the monthly payments and receive the CTC as a lump sum. Some people may want to opt-out of monthly payments if they are unsure they would be eligible for the CTC due to income changes.

How to Take Action

Encourage your friends, family, and neighbors to check their eligibility and sign up for the payments. Resources and guides in a variety of languages can be found here.

Sharing personal stories and community impact are the most effective ways of influencing your legislators. Contact your Representatives to share your personal stories or thoughts on CTC!