Today, tens of millions of American families will begin to see their first monthly Child Tax Credit payments. The Department of Treasury estimates that $15 billion were distributed today to tens of millions of working families with 60 million children. For the 86% of families using direct deposit, they will receive their child payment today, July 15 th , and the 15 th of every month for the rest of 2021. It will show up in their bank accounts described as “ChildCTC.” Others will receive their check in the mail today or in the coming days.
The American Rescue Plan is providing the largest-ever Child Tax Credit – increasing from $2,000 per child to $3,000 for each child between the ages of 6 and 17, and to $3,600 for each child under the age of 6. This historic increase will provide middle-class families with critical tax relief and will lift millions of children out of poverty.
Major Tax Cut for Middle Class Working Families: Nearly all middle-class families will receive the expanded child tax credit, to help them meet the costs of raising children with the security and dignity they deserve. And because monthly payments start today, they won’t have to wait until tax season for tax relief that millions of families need now.
The first monthly Child Tax Credit ever: Today, four months after the American Rescue Plan was signed into law, tens of millions of families with nearly 60 million children are receiving the first-ever monthly payments of the Child Tax Credit. This reflects the swift implementation efforts of the White House, Treasury, and the IRS.
Over 97 percent of Families Receiving the 2021 Child Tax Credit are Working: The Treasury Department estimates that over 97 percent of families that will receive the expanded Child Tax Credit are working familieswith wages or self-employment income. And for the families that don’t have income, many of those are seniors taking care of grandchildren or people with serious disabilities and health issues.
More than 26 million Children from Hard-Pressed Families will now get a full Child Tax Credit: Treasury estimates that the hard-pressed low-income families of over 26 million children that previously would have gotten a smaller Child Tax Credit than families with higher earnings, will now receive the full expanded Child Tax Credit. Prior to the American Rescue Plan, researchers found that over half of Black and Hispanic children were in families ineligible for the full Child Tax Credit because of too little earnings.
A Historic Reduction in Child Poverty: The expanded Child Tax Credit is the main driver in experts’ projections that the American Rescue Plan could cut child poverty by around half. Even by the most conservative estimates, the Child Tax Credit alone is projected to reduce child poverty by a multiple of any previous year.
Administration-wide effort to help sign up additional children and their families:
Investment with a high return: Studies show that children whose families get more in refundable credits do better in school and score higher on standardized tests, are more likely to graduate high school and attend college, and make more money as adults. These children are also less likely to face the early onset of disabilities and health issues like diabetes that can represent key barriers to employment later in life. In fact, research from Columbia University shows that each $1 invested in the Child Tax Credit returns over $8 to society in improved health for children and their parents, better educational outcomes and higher future incomes, and reduced crime and criminal justice costs.
Extending the new Child Tax Credit for years to come: The American Rescue Plan’s expanded Child Tax Credit is only for 2021. This is a historic investment that will lift children and working families out of poverty. That’s why President Biden believes that we should extend the new Child Tax Credit for years and years to come. He is proposing that we do so in his American Families Plan and Build Back Better agenda.