WISCONSIN (NBC 26) — Big news for many parents, there's money headed your way starting next month.
Monthly child tax credits are set to begin as part of a federal recovery effort.
When you add day-to-day expenses, it's no secret that raising a child can get expensive.
Soon, a bump in the child tax credit will help many make ends meet.
"The credit is now much bigger upwards of 3600 dollars for certain dependents. The money is refundable which means you don't have to have tax liability or income of any type to get the credit, but most importantly the big change feature is that it will be prepaid in part starting in July,” said Mark Steber, Jackson Hewitt Chief Tax Officer.
In the past families would get the credit as a lump payment once a year, but with these advance payments starting July 15, parents will get a direct deposit of $300 a month for each child under six and $250 for each child six to 17-years-old.
Steber explains a few reasons why some families may choose to opt out of participating in receiving monthly payment from the child tax credit.
Watch below:
"40 percent of tax payers that we surveyed and its a pretty big base, did not even realize there were changes to the tax child credit program. And this was after the law was passed. So for whatever reason a lot of folks may be surprised when money starts showing up in their checking accounts or checks come in the mail,” Steber said.
For one Brown County organization, they say this credit can also help parents struggling to pay for child care.
“It can be more expensive to send your infant to child care than it can to be send your child to college for the university tuition so the child tax credit could may be really able to help those families,” said Paula Breese, Family & Childcare Resources of N.E.W. Executive Director.
These changes are temporary and run through December.
The benefit is part of the Biden administration's $1.9 trillion dollar coronavirus rescue plan.
The credit is available to families who have an adjusted gross income of less than $75,000 for single parents and $150,000 for married couples filing jointly.
Steber explains that the pre-payment child tax credits are based on the best information the IRS has from you:
For more information or questions you may have, you can click here to be redirected to the IRS website.
