PRESIDENT Joe Biden announced on Monday that American families will automatically receive monthly payments of $250 per child from July 15 onward under a new tax break.
Roughly 39million families will receive the direct cash payment, created under the American Rescue plan signed by Biden in March.
The money will be issued by the IRS directly into the bank accounts on file for the family, with no action needed.
The IRS will issue checks or debit cards in the mail to the minority of families for whom they have no bank account information.
Families will receive $250 for each dependent aged 18 years old and younger, and $300 for dependents aged six years and younger.
"This is the great news," Biden said during a briefing from the White House on Monday.
"You won't need to wait until next years tax returns to get that break.
"I'm announcing today that on July 15 and on the 15th of every month thereafter throughout the year, you will get deposited in your bank account half of your tax cut at least – $250 per child each month.
"A direct deposit into your account," the president added.
"So if you're a working family with two kids, you're going to get $500 a month into your bank account on the 15th of every month starting July."
Previously, families eligible for the credit had to wait to claim it when they filed their taxes, but Biden’s new plan allows half of the money to be paid in advance each month.
Low and middle-income families will benefit from the newly expanded Child Tax Credit, with an estimated 88 percent of children set to receive them, according to the Associated Press.
It will be issued to the families of more than 65million children.
Biden’s $1.9 trillion coronavirus relief package expanded the child tax credit for one year, and the monthly payouts will continue through December.
The benefits total $3,600 each year for children under 6 and $3,000 for those who are older up until age 17.
The credit phases out for individuals earning more than $75,000 a year, $112,500 for heads of household, or $150,000 for those married and filing jointly, USA Today reported.
It will be issued on the 15th of each month, unless it falls on a holiday on the weekend.
The IRS will issue the funds to families on the next working weekday in these instances.
The payments will be based on 2020 tax returns for the most part.
The IRS will use 2019 tax returns if a 2020 return has not been filed or processed yet.
A portal has been established to reach low-income households that do not typically file taxes.
It will allow them to claim both the enhanced child tax credit and stimulus payments they may have missed, according to CNN.
As of now, the credit is set to expire in 2022.
However, as part of his joint address to Congress in April, President Biden spoke about plans to expand $3,600 child tax credits until 2025.
"The American Families Plan puts money directly into the pockets of millions of families," Biden told Congress during his speech.
"Together, let's extend the Child Tax Credit at least through the end of 2025."
Biden's American Families Plan also includes plans to provide free, universal pre-K for three- and four-year-old children, free community college for two years, and free school meals to children from low-income households.
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