Parents will then report that they have received these payments - and will claim the other half of the credit - when filing their tax return in April.Ī tax credit is the amount you are allowed to subtract from the income taxes you owe to the government. The new advance child tax credit pays parents part of the tax credit they will receive at the end of the year in monthly installments. Here's everything you need to know about the payments parents will start receiving in just a few weeks: What is the advance child tax credit? For now, the advance payments and increased amounts run through Dec. The amount has increased over the years and will increase again with the new program on July 15. Part of the American Rescue Plan, which President Joe Biden signed in March, the new advance payments add to the child tax credit, which has existed in some form since 1997. If eligible, parents may receive half of their annual tax credit money in the form of monthly payments. Parents will receive the other half of the credit when they file their income tax returns. Starting July 15, parents will be eligible to receive a new monthly payment for each child thanks to a new federal law.Ĭalled an advanced child tax credit, the monthly payments are connected to your income taxes.
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