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Child tax credit changes: More money for parents beginning July

What families need to know.
Parents' Day CNN 072819
Posted at 12:44 PM, Jun 15, 2021
and last updated 2021-06-15 13:59:42-04

WISCONSIN (NBC 26) — Big news for many parents - there's money headed your way starting next month.

Monthly child tax credits are set to begin as part of a federal recovery effort.

When you add day-to-day expenses, it's no secret that raising a child can get expensive.

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FILE - In this June 15, 2018 file photo, twenty dollar bills are counted in North Andover, Mass. Amid the pandemic-fueled recession, your job description and responsibilities may have changed. Whether you’ve taken on more tasks after employees were laid off or your household income has taken a hit, there are plenty of reasons to negotiate your salary even in tough times. (AP Photo/Elise Amendola, File)

Soon, a bump in the child tax credit will help many make ends meet.

"The credit is now much bigger, upwards of $3,600 for certain dependents. The money is refundable which means you don't have to have tax liability or income of any type to get the credit, but most importantly the big change feature is that it will be prepaid in part starting in July,” said Mark Steber, Jackson Hewitt Chief Tax Officer.

In the past families would get the credit as a lump payment once a year, but with these advance payments starting July 15, parents will get a direct deposit of $300 a month for each child under six and $250 for each child six to 17-years-old.

Child tax credit changes; more money for parents beginning July

Steber explains a few reasons why some families may choose to opt-out of participating in receiving a monthly payment from the child tax credit.

Watch below:

"40 percent of tax payers that we surveyed and its a pretty big base, did not even realize there were changes to the tax child credit program. And this was after the law was passed. So for whatever reason a lot of folks may be surprised when money starts showing up in their checking accounts or checks come in the mail,” Steber said.

For one Brown County organization, they say this credit can also help parents struggling to pay for child care.

Child tax credit changes; more money for parents beginning July

“It can be more expensive to send your infant to child care than it can to send your child to college for the university tuition, so the child tax credit could really help those families,” said Paula Breese, Family & Childcare Resources of N.E.W. Executive Director.

These changes are temporary and run through December.

The benefit is part of the Biden administration's $1.9 trillion dollar coronavirus rescue plan.

The credit is available to families who have an adjusted gross income of less than $75,000 for single parents and $150,000 for married couples filing jointly.

Child tax credit changes; more money for parents beginning July

Steber explains that the pre-payment child tax credits are based on the best information the IRS has from you:

For more information or questions you may have, you can click here to be redirected to the IRS website.