Parents could start receiving the new $3,000 child tax credit by summer

On Saturday, the Senate voted to pass the $1.9 trillion American Rescue Plan Act, which includes provisions that increase the child tax creditto $3,000 per child ages 6 to 17 and $3,600 annually for children under 6 for the tax year 2021.

And Americans with children under 18 may start receiving a portion of the new credit as early as this summer.

Under Saturday’s legislation, the IRS could start providing advances on the 2021 credit through periodic payments of $250 for school-aged children starting as early as July, depending on what the Treasury Department determines is workable. Under the proposed schedule, which could be as frequent as monthly, families could receive nearly half of their total child tax credit this year and then claim the remaining amount on their 2021 tax returns.

“This plan gives those families who are struggling the most the help and the breathing room they need to get through this moment,” President Joe Biden said in a statement Saturday. 

The new enhanced benefits, which specifically cover teens who are 17 for the first time, are income-based and would start to phase out for individuals earning more than $75,000 a year or $150,000 for those married filing jointly. 

From there, the credit would be reduced by $50 for every additional $1,000 of adjusted gross income earned. That means the $3,000 credit provided to parents of children aged 6 to 17 would be phased out completely for individuals earning $95,000 and those making $170,000 and filing jointly. 

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