Child Tax Credit Calculator: How Much Will My Payment Be?

Millions of families on Thursday will receive the first installment of the expanded Child Tax Credit.

Up to 39 million U.S. households are set to get the benefit, according to the IRS and Treasury Department, and that number covers nearly 90 percent of children in the United States, the White House said.

The enhanced Child Tax Credit was signed by President Joe Biden in March as part of the American Rescue Plan. The credit was increased from $2,000 to up to $3,600 per child for each child under 6, or $3,000 per child aged 6 to 17.

Half of the benefit will be divided into six monthly payments of $250 or $300, starting in July and continuing through December. The funds will be sent out on the 15th of each month, unless that date falls on a weekend or holiday.

The remaining Child Tax Credit balance can be claimed on 2021 tax returns. Families also have the option of unenrolling from the monthly program and claiming 100 percent of the benefit in 2022.

To qualify for the full payments, a single parent must report an annual income of $112,500 or less. Joint tax filers must have an income cap of $150,000 in order to receive the maximum amount.

Families with incomes above those amounts will receive a reduced payment. According to the IRS, the first phaseout can eliminate the $1,600 increase for qualifying children under the age of 6, and the $1,000 increase for children ages 6 through 17.

The Child Tax Credit will begin to be reduced below $2,000 per child if an individual reports an income of $200,000. For married couples and joint filers, the credit will dip below $2,000 if their reported income is $400,000. This second phaseout reduces the Child Tax Credit by $50 for each $1,000 above those income thresholds.

Payments are based on a person's most recent tax return and adjusted gross income. Taxpayers can either calculate their AGI by adding up all of their income and subtracting eligible deductions or looking at Form 1040 of their latest tax return.

That information can then be plugged into a Child Tax Credit calculator created by Kilpinger, a publisher of business forecasts and personal finance advice. Some financial institutions, including H&R Block and Bankrate, also have calculators available on their websites.

The White House has touted the expanded Child Tax Credit as a new way to help lift millions of children out of poverty.

"Folks, this Child Tax Credit is a huge step towards a tax system that works for the middle class," President Joe Biden tweeted last month on Child Tax Credit Awareness Day.

The expanded Child Tax Credit is available only through 2021. Biden has proposed extending the benefit for several more years under the American Families Plan, which, if passed by Congress, would also provide paid family leave, free community college and universal preschool.

If the benefit were to continue beyond this year, it could cut child poverty by 40 percent, according to a study from the Center on Budget and Policy Priorities, a progressive think tank.

Newsweek reached out to the Treasury Department for additional comment on the Child Tax Credit but didn't receive a response before publication.