Starting in July, a chunk of that credit will be sent to taxpayers in installments of $250 or $300 each month through the end of the year.
The size of the payments reduces for higher income levels: Households earning more than $150,000 will receive up to $2,000 per child and households earning more than $400,000 will receive even less.
A household earning less than $150,000 with a child under the age of 6, for example, would receive checks of $300 a month until December, totaling $1,800. The remainder of the full credit — roughly $1,800 — will then be distributed when families file their taxes in 2022. If that household had two children under 6, they would get $600 per month.
I’m a single parent. How much will I get?
This is where things get a little complicated. For an unmarried parent filing as the head of household, the size of the credit reduces if they earn more than $112,500. So a single parent with a child under the age of 6 who earns $150,000 — as much as a married couple filing jointly — would get less of a tax credit.
Representative Katie Porter, Democrat of California and a single mother of three, is one of several outspoken voices who have repeatedly pointed out this wrinkle in the American Rescue Plan, and last month she introduced legislation — written with Representatives Ayanna Pressley and Don Beyer — to eliminate the different income levels for married or single parents.
“There’s no discount for single parents at grocery stores, child care centers, or doctors’ offices,” she noted in a statement. “Yet the child tax credit gives less help to single parent families.”
How do I sign up?
If you filed taxes last year, you don’t have to do anything. The money will be directly deposited to your bank account every month. Before the first check arrives, on July 15, the I.R.S. will also mail you a letter — Letter 6417 — to let you know how much you’ll be receiving every month.