Stimulus Update: More Than 35 Million Families Have Received Payments for the Child Tax Credit

Monthly Child Tax Credit payments are now in the works, and they're apt to work wonders for a lot of families.

When the American Rescue Plan was signed into law back in March, it did a lot more than blast out a round of $1,400 stimulus checks. It also expanded the Child Tax Credit.

Previously, the Child Tax Credit was worth up to $2,000 for dependents under the age of 17. Under the expanded version, the credit can be worth up to $3,600 for children under the age of 6 and up to $3,000 for those aged 6 to 17. Plus, some older children may render their families eligible for money, too.

It also used to be that the Child Tax Credit was paid out in the form of a tax refund. This year, the credit works differently. Families who are entitled to it will get half of their money in monthly installments this year, with the remainder to be paid out as a single lump sum next year.

Those monthly installments actually began last week, which means a lot of families may already be sitting on extra money in their bank accounts. In fact, the IRS says it's issued $15 billion in Child Tax Credit dollars. It also says that 35.2 million families have already been sent their money.

So far, the average payment from the first round of monthly Child Tax Credits equaled $423. And those payments are estimated to reach the families of 60 million children.

A true lifeline

While the U.S. economy is in a much better place now than it was back when the American Rescue Plan was signed into law, it's also still down millions of jobs compared to the number that were available before the pandemic began. Furthermore, while the national jobless rate has declined, many parents have struggled to get back into the workforce in the absence of full-time in-person school that serves as childcare.

Even families with childcare arrangements in place may be struggling due to its high cost. These monthly Child Tax Credit payments could therefore help ease that burden at a time when money may still be tight for a lot of people.

Those monthly payments are also coming at a time when inflation is driving the cost of everyday expenses up. For minimum or low-wage earners, those upticks in price can be brutal, but getting monthly Child Tax Credit payments could help offset them.

All told, the newly expanded Child Tax Credit is estimated to reach 90% of U.S. children and lift about 4.1 million above the poverty line, according to the Center on Budget and Policy Priorities. Right now, the expanded Child Tax Credit is only applicable to the current tax year. But lawmakers are fighting to extend the expanded credit with the ultimate goal of making it permanent.

Whether they're able to succeed is yet to be determined. But given that a fourth stimulus check is by no means a given, parents who are eligible for the Child Tax Credit will at least see some extra money flowing in over the course of the next few months.