Monthly child tax credit payments start today for more than 35 million Americans
Yahoo Finance's Denitsa Tsekova joins the Yahoo Finance Live panel to discuss the latest as child tax credit payments roll out today.
Video Transcript
- To shift focus, though. Back here at home, a rather interesting and exciting time for some parents out there as the first payments for child tax credits, early child tax credits are out the door this week. Approximately $15 billion in total payments were already distributed, according to the government. And for more on that, I want to bring I'm "Yahoo Finance's" Denitsa Tsekova with more details around that. Denitsa has a lot of parents celebrating some of the windfalls they're seeing already pop into their accounts.
DENITSA TSEKOVA: Exactly. That's a big day for a lot of parents because around 88% of US children are actually getting those payments. So it's pretty much impacting most of US families.
The IRS has sent the first rounds, and it is reaching already families of 60 million children across the US. The average payment they're getting is just below $500. There will be five more payments. This is just the first one. So they will go through December.
The majority of the payments will go through direct deposit, so around 86% have already got them through direct deposit. The remainder will get them through their mail. It could be a debit card, it could be a check, so this may take a little bit more time. As a reminder, the monthly payments are up to $300 for a child under six and up to $250 for children between the age of six and 17, families will get half of their payments in terms of monthly payments, and then the rest of the payments, they were getting their tax refunds in 2021.
- And, Denitsa, just a reminder that this is still a temporary bump. When we were talking about child tax credit, President Biden has made it pretty clear that he wants this to be a permanent increase. Where do things stand right now on those discussions?
DENITSA TSEKOVA: Yeah, exactly. So this is a one year extension. It's for this year and next tax season, practically. President Biden has a five-year proposal to make this CTC extension happening. It's part of his infrastructure package that is currently moving through Congress, whether through its reconciliation or another deal with the Republican Party.
But as of now, we're having this CTC extension for only a year. But there are many benefits of it. So the payments are bigger, the credit is made fully refundable, and, obviously, the monthly payments right here. And a lot of experts are saying this could cut child poverty in half. So if we see this being expanded for five years, it could potentially have really big impact on those families, and especially low-income families.
- Yeah, no doubt. An average of almost $500 per family coming out, that's some serious cash for a lot of people. And it's going to be interesting for some others come tax time to see how it impacts some of those returns as well. But, Denitsa, thank you. I appreciate you bringing us the updates there.
