Child Tax Credit: Here’s how it works

CHARLOTTE — Many parents are about to see some extra cash deposited into their bank accounts this month.

The latest stimulus package made major changes involving the child tax credit. A portion of the credit is now being split into small monthly payments to help parents recover from the setbacks caused by the coronavirus pandemic.

Child Tax Credit: Letters sent to families who may qualify for monthly payments

Here’s a breakdown of what you need to know about the child tax credit:

The payments will begin on July 15 and will be up to $300 per month for each qualifying child under age 6, and up to $250 per month for each qualifying child ages 6 to 17.

The IRS will send those payments monthly on July 15, August 15, September 15, October 15, November 15 and December 15.

The payments will be up to 50% of the Child Tax Credit.

The amount:

$3,600 for each child under 6 years old (up to half would be given between July and December, which equals about $300 a month)
$3,000 for kids between 6 and 17 (up to half would be given between July and December, which equals about $250 a month)

You get the full amount if you make:

$75,000 or less filing taxes as an individual
$150,000 or less as a married couple

If you make more than that, you get $50 less for every additional $1,000 you make.

An important note: The child has to live with you for more than half the year to qualify.

Child tax credit: How will it work and when will parents begin to see monthly payments?

The timing:

You don’t have to wait until next year to get the money.

The IRS will give you half this year and the other half when you file taxes next year.

The agency plans to make the payments on the 15th of every month, starting this month and they will last through December.

You should get the money however you got your stimulus payment so direct deposit, paper check or debit card.

If you file taxes, it’s automatic. You don’t have to do anything. If you don’t file taxes, you need to contact the IRS.

An important note: Remember the “Get My Payment” tool the IRS used for stimulus checks? The agency has something similar for this tax credit. You can find it here.

Child Tax Credit: IRS to open portals on July 1; checks will begin July 15