Millions of families in the U.S. are receiving their first monthly child tax credit relief payments Thursday and President Joe Biden delivered remarks to acknowledge the "historic day."
"I believe this is actually a historic day," said Biden. "It's historic and it's our effort to make another giant step towards ending child poverty in America."
The president also briefly outlined how the tax credit works.
“Beginning this morning, nearly all working families – that is people making under $150,000 as families, or an individual making under $125,000 – who have children or raising children in America, they’re going to receive their first monthly tax cut payment,” said Biden.
“For every child under the age of 6, a parent will get $3,600 a year, for every child 6 to 17, they’ll get $3,000 per year,” he said.
He said those payments are from the expanded child tax credit that was signed into law as part of his American Rescue Plan.
"It’s one of the largest ever single tax cuts for families with children and it’s a reflection of our belief that the people of this country who need a tax cut aren’t the folks at the top,” said Biden.
Biden said the tax credit has the potential to reduce child poverty in the same way that Social Security reduced poverty for the elderly.
The U.S. Department of the Treasury and the Internal Revenue Service (IRS) said Thursday that roughly $15 billion was paid to families that include nearly 60 million eligible children in the first monthly payment of the expanded and newly-advanceable child tax credit.
Eligible families received a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 to 17.
The American Rescue Plan, a COVID-19 stimulus package passed by Congress in March, expanded the child tax credit for 2021 to get more help to more families.
The credit increased from $2,000 per child in 2020 to $3,600 for each child under age 6. For each child ages 6 to 16, it’s increased from $2,000 to $3,000. It also makes 17-year-olds eligible for the $3,000 credit.
The IRS says it’s sending out half of the 2021 child tax credit in monthly payments this year to get money to families sooner.
Experts have projected the American Rescue Plan will lift more than 5 million children out of poverty this year, cutting child poverty by more than half, according to the Treasury Department. Officials say the expanded child tax credit is the largest contributor to the reduction.
Taxpayers generally don’t need to take any action to receive payments if they filed an income tax return in either 2019 or 2020 and claimed an eligible child, or who signed up to get an economic impact payment and claimed an eligible child last year, according to the Treasury Department.
Officials say roughly 86% of the families who received payments on Thursday did so by direct deposit, and the remainder will receive checks in the mail. And these payments will continue to be made on the 15th of each month, unless the 15th falls on a weekend or holiday, in which case the payment will be made the preceding business day.
For additional information on how you can access the child tax credit, click here.