More than 39 million households will receive their first monthly "family stimulus check" on July 15 — just about one month away.
Middle- and lower-income families can get up to $300 per child during each month throughout the second half of 2021, thanks to a temporary expansion of the child tax credit. It was included in the massive COVID rescue bill President Joe Biden signed in March.
If you have kids and need extra cash to pay down debt, cover household expenses or just do something fun as a family, a little boost could be on its way.
Here's more on what you may have to do to get this new form of stimulus cash.
How you qualify
Most eligible families won’t have to do anything to get their money.
The IRS, the agency responsible for dispersing the funds, says it will calculate your payment based on your 2020 tax return. Couples who have kids and earn $150,000 or less — and individual taxpayers making up to $75,000 who have children — should be all set to receive their cash.
If you qualify for the checks, you should be receiving a letter shortly from the IRS. The first wave of letters went out this week to eligible households. Later, a second letter will estimate how much each family will receive per month.
Eligible families will get six months of $250 payments for every kid ages 6 to 17, and $300 for each child under 6, through December.
In previous years, the child credit was worth as much as $2,000 per child and was paid out through tax refunds during the annual filing season. The more generous credit for 2021 has a value of up to $3,600 per kid, and half of that is being paid out in advance — through the monthly checks.
How to update your payment information
If you haven’t received a letter, but you believe you should qualify for the payments, you still have some time to update your records with the IRS.
This year's delayed tax-filing deadline was over a month ago, on May 17. If you haven’t yet submitted your return, you’ll want to file your taxes immediately, so the IRS will see whether your income qualifies you for the payments and will have your current banking information for depositing that money.
The IRS website has a page where parents can find more information on the advance tax credit payments, and the agency is promising an update in the coming weeks.
Through that page, you'll be able to access the Child Tax Credit Update Portal, where you can: report any changes to your income or filing status; adjust your number of qualifying children; update your direct deposit information; and make any other changes so you'll get the right amount of stimulus as quickly as possible.
When to expect your money
You should be receiving your money either in the form of a mailed paper check or through direct deposit in the middle of each month.
The IRS says these will be the payment dates:
The beefed-up tax credit is expected to help cut child poverty in the U.S. nearly in half, according to Columbia University’s Center on Poverty and Social Policy. The White House says that translates into lifting nearly 5 million children out of poverty this year.
Biden is pressed to make the checks permanent
Given how helpful the higher credit will be for low-income and middle-class families, some lawmakers are pushing President Joe Biden to make the expansion permanent.
The president's stimulus package that passed in March made the bigger credit a 2021-only thing. Biden's "families plan," which is now before Congress, would keep the expanded credit going through 2025.
But Rep. Richard Neal, the chairman of the powerful House Ways and Means Committee, has introduced a motion to extend the credit indefinitely.
“Now that nearly 90% of our nation’s children will benefit from this critical lifeline, we must make this change permanent. Millions of families are counting on us," Neal, a Massachusetts Democrat, said in a statement.
What to do if you need more cash now
If your household can't wait until next month for a few extra hundred dollars, or if you won't qualify for the new family stimulus checks, you have some options to find the funds in your budget right now.
Become your own insurance adjustor. You may be overpaying for insurance by hundreds every month. With everyone staying home during the pandemic and driving much less, some car insurance companies have been giving customers price breaks. Not yours? Shop around for a better deal. You also can save on homeowners insurance by comparing rates to find a less expensive policy.
Refinance your mortgage and slash your payments. Mortgage rates are still among the cheapest in history. Refinancing your current home loan could save you thousands through the rest of this year. With the average rate on a 30-year home loan back under 3%, mortgage tech and data provider Black Knight says 14.1 million homeowners could refi and cut their monthly payments by an average $287.
Invest like a pro for pennies. Even if you don't have much money, you can still earn returns in the high-flying stock market. Just download a popular app that allows you to invest your "spare change" — and turn your pennies into a diversified portfolio.