IRS Commissioner Charles Rettig said yesterday (April 13) that the child tax credit payments promised by the Biden stimulus bill will begin in July. [According to CNN, at a Senate Finance Committee hearing, Secretary Rettig said, "We fully expect them to begin in July. We expect the payments to begin month-to-month." [This is a welcome change from last month, when Rettig told the House Finance Committee that child tax credit payments may be delayed and checks will be less than monthly because of the burden on the IRS from processing tax returns filed by May 17 and issuing stimulus checks.

The American Bailout Plan Act of 2021, which created the $1,400 third stimulus check, also increased the child tax credit for most taxpayers from $2,000 per child to $3,000 per child ages 6-17 and $3,600 per child under age 6 The new law also increases the previously exempted $17,000 per child. In addition, the previously excluded 17-year-olds are now also eligible for the deduction.

In previous years, many low-income parents and legal guardians were unable to recoup the full amount of the child tax credit (which is basically deducted from their tax liability) because the child tax credit negatively affected their tax liability. That "negative" money disappeared.

Starting in 2021, that will change. All income-eligible parents who receive the full amount of their third stimulus check will receive up to half of their child tax credit as a direct payment (technically an advance) from the federal government.

If you earn up to $75,000 in 2020 as a single person or $150,000 as a working couple, you will receive $300 for each child under age 6 and $250 for each child ages 6 to 17, paid monthly from July through December.

A child tax credit calculator will tell you how much you will receive. For example, if you have two teenagers at home, you will likely get $500 per month; if you have two children under the age of 6 and one child between the ages of 6 and 18, you will get $850.

To qualify for the deduction, an eligible child must have a Social Security number and live with the parent or guardian claiming them as a dependent for at least six months of the year.

Rettig told the Senate Finance Committee that the IRS will launch an online portal on July 1 to allow parents and legal guardians to communicate with the IRS about changes, disputes, and other issues that may affect child tax credit payments.

Parents are not required to file with the IRS, but must file a 2020 tax return. According to Letting, they will also need to verify their identity and that they are eligible for the payments, but he did not provide details on how that will be addressed.

The increase in the child tax credit is temporary and applies only to tax year 2021; according to CNBC, the child tax credit amount will be phased out for single filers with income up to $95,000 and joint filers with income up to $170,000.

Single filers with incomes between $95,001 and $200,000 and joint filers with incomes between $170,001 and $400,000 will receive the old child tax credit of $2,000 per child under age 18. Beyond this limit, the credit is phased out by $50 for each $1,000 of income, in accordance with pre-2021 tax law.

Yesterday, in response to a question from Senator Sherrod Brown (D-Ohio) asking if the IRS is ready to start paying children in July, Rettig replied, "Yes."

"If some unforeseen circumstance prevents us from going forward as planned," Rettig added, "I will advise you and the committee."