Good news: if you are a parent, and you and your spouse together make less than $150,000 per year, you can expect a check at some point in the coming weeks. 

As part of the American Rescue Plan Act, signed in March 2021, half of this year’s Child Tax Credit is being mailed out in advance. Six payments are being made to an estimated thirty-six million American families; each payment represents one-twelfth of the total sum, with the other half slated to be paid as a tax rebate in April 2022 when taxes are filed. 

By now, if you are receiving one of the payments, the IRS should have sent you a letter detailing how much you are expected to receive. If you did not receive a letter, however, you might still be eligible; you can check the IRS’s website, and enter your information via an online portal, to determine whether you will receive the payments or not. 

Prior to 2021, the total payment was $2,000 per child per year. The ARPA increased this number substantially, to $3,000 for children aged six and older and $3,600 for children younger than six. This means that each advance payment will be worth either $250 or $300 per child, for parents jointly making less than $150,000 per year or single parents making less than $75,000 per year. 

For the first time, the payment is also fully refundable, meaning that you are eligible to keep the money if you do not have to pay the full sum back in taxes. This changes the measure from a tax rebate—as the “Child Tax Credit” has historically been—to a quasi-stimulus check for parents. 

However, there is a catch: while the payments will invariably end up paying for themselves, they are added to a family’s total income for the year, meaning that a family’s tax bracket could increase. This has led to fears that a family might accept and spend the advance payments from July to December, only to find a surprisingly high tax bill in April.

To avoid this, you can keep track of how much you owe in advance. However, if you can afford to miss the early payments, you can opt-out of them via the IRS website. If you do so, then you will receive the full payment, minus taxes, in April 2022. The deadline for opting out of July’s payment has already passed, but you can opt-out for the next five months via an online portal. 

Trevor Filseth is a current and foreign affairs writer for The National Interest. 

Image: Reuters