Monthly $300 Child Tax Credit Payments: How to Find Out if You're Eligible

Millions of American households are slated to begin collecting $300 monthly payments automatically this summer as part of President Joe Biden's $1.9 trillion coronavirus relief package.

The Treasury Department announced Monday that the first payment of the expanded Child Tax Credit (CTC) will be sent out to families on July 15. Roughly 39 million, which the department said covers 88 percent of children in the U.S.—will receive them automatically.

"ARP is projected to lift more than 5 million children out of poverty this year, cutting child poverty by more than half!" the agency wrote in a Twitter post, referring to Biden's American Rescue Plan.

Those claiming the tax credit for the year 2021 will receive up to $3,000 per qualifying child between the ages of 6 and 17. For children under 6, households will get $3,600. The credit amount was previously capped at $2,000.

The CTC will be doled out in monthly installments from July through December. Eligible families will receive up to $300 per month for each child under age 6, and up to $250 per month for each child 6 and above. The payments will be made through direct deposit, paper check or debit cards.

The full credit will be available to individuals who have children and an adjusted gross income of less than $75,000. For a married couple filing jointly, the income cap is $150,000. The benefit will phase out for taxpayers who earn more than that annually, stopping altogether for individuals making $95,000 and married couples making $170,000.

The IRS said Monday that the payments will be estimated from the information on taxpayers' 2020 tax returns, or their 2019 returns if 2020 forms have not been filed and processed.

"Eligible taxpayers do not need to take any action now other than to file their 2020 tax return if they have not done so," the IRS said.

The Treasury Department also said that "while most taxpayers will not be required to take any action to receive their payments, Treasury and the IRS will continue outreach efforts with partner organizations over the coming months to make more families aware of their eligibility."

Households that are outside of the income caps outlined in the American Rescue Plan will still be eligible for the maximum credit of $2,000 for children under 17. The previous CTC allowed individuals with incomes below $200,000, and joint filers with incomes below $400,000, to claim it.

Biden touted the expanded payments in a statement Monday, saying the American Rescue Plan is delivering "critical tax relief" to the middle-class and working families.

"With today's announcement, about 90% of families with children will get this new tax relief automatically, starting in July," the president said. "While the American Rescue Plan provides for this vital tax relief to hard working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come. For working families with children, this tax cut sends a clear message: help is here."

Newsweek reached out to the Treasury Department for additional information but did not receive a response before publication.