As part of the $1.9 trillion American Rescue Plan that President Joe Biden signed into law in March, the new IRS child child tax credit begins its rollout this month. Qualifying households will be receiving $3,600 annually per child under age 6, and $3,000 per child between the ages of 6 and 17 years old. The IRS will start issuing payments on July 15. Recipients will receive monthly payments of either $300 or $250 per child until December 2021, upon which they will receive the rest of their payment after filing their 2021 tax return.
The IRS estimates that 90% of families with children are eligible for the child tax credit. Individual taxpayers who earn up to $75,000 per year, heads of household who earn up to $112,500, and married taxpayers or widows/widowers who make up to $150,000 are all eligible for the tax credit. Eligible families who do not normally file a tax return can use the IRS’ new Child Tax Credit non-filer Sign-up tool to make sure they receive the payments they are entitled to.
The financial impact of the expanded child tax credit
In July 2 remarks on the June Jobs Report in the White House briefing room, Biden said the Child Tax Credit would lead to a “historic reduction in child poverty,” which would usher in “long-term benefits for our economy.”
For a sense of how much the Child Tax Credit will allow families to save, the table below uses anonymized data from doxo’s 5 million users across 30,000+ US zip codes to show the average monthly bill cost in the top 10 household bill categories. One child tax credit payment for a child under age 6 can give families enough money to cover a substantial portion of these bills, whether it be 3 months of rent or mortage payments, or 40 months of life insurance.
If you’re looking to compare the data below with more local data specific to the city or town where you live, doxo has that data as well. Use the search bar to browse doxoINSIGHTS’ Regional Bill Comparison database for average bills in the 900+ core based statistical areas of the US.
Months of bill payments subsidized by a $3,600 expanded child tax credit
|Bill Category||Average Monthly Bill (all US households)||# of Months Subsidized by Child Tax Credit*|
|Auto Loan||$411||9 mo.|
|Auto Insurance||$185||19 mo.|
|Cable & Internet||$115||31 mo.|
|Health Insurance||$113||32 mo.|
|Mobile Phone||$102||35 mo.|
|Life Insurance||$88||40 mo.|
|Alarm & Security||$87||41 mo.|
About doxoINSIGHTS’ methodology:
doxoINSIGHTS leverages consumer surveys and doxo’s unique aggregate data set, comprising bill payment activity by 5 million paying consumers across 97% of U.S. zip codes. doxo’s payment network covers over 100,000 billers in 45 different service categories and enables payments using bank accounts, credit cards or debit cards.
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