Child Tax Credit payments begin hitting bank accounts: What you need to know

Fisrt child tax credit deposited

The first child tax credit has now been deposited, 2.2 million Florida families will get either $250 or $300 each month for the rest of this year. The exact amount depends on the age of your children.

ORLANDO, Fla. - Many parents are about to see some extra money in their bank accounts in the form of a monthly Child Tax Credit.

Roughly 36 million families will start getting those payments as soon as Thursday and experts are warning of scammers trying to take advantage of the credit and why some Americans may have to pay it back.

The Federal Trade Commission says they saw an increase in scams and fraud calls since the pandemic began and are concerned that these calls will increase as scammers look to take advantage of the enhanced Child Tax Credit.

Starting Thursday, qualifying American families could see at least $250 extra in their bank accounts for every child in the home. That money is set to be deposited each month over six months.

This is all thanks to the temporary expansion of the federal Child Tax Credit. It increases the original $2,000 annual credit you would normally get to up to 2,600 per child. The benefits total $3,600 annually for children under 6 and $3,000 for those who are older.

Congressman Darren Soto says this will have a huge impact on local families who can’t afford to wait until the next tax season.

"We know that many of these families are working in hotels or in tourism at the parks or in small businesses or in construction or agriculture. They’re working 40 to 60 hour weeks. No family that works full time should live in poverty, should live without knowing how to pay for their next meal, how to help out their children and put food on the table and pay their rent."

After the monthly payments end in December, the rest of the Child Tax Credit can be claimed on your tax return.

Financial planners say some taxpayers run the risk of having to pay back the Child Tax Credit advance if they make more than the income limits.

Who qualifies for the monthly Child Tax Credit payments?

Nearly 88 percent of children are set to receive the benefits without their parents needing to take any additional action, according to the Treasury Department. The IRS sent letters to the millions of families who may qualify for the payments, based on their federal income tax returns in either 2019 or 2020.

The payments are based on working families’ adjusted gross income. Those who earn below certain income thresholds will receive the full credit amount:

$75,000 or less for single taxpayers
$112,500 or less for heads of household
$150,000 or less for married couples filing a joint return and qualified widows and widowers

Those earning above these incomes may still receive the credit but a lesser amount. The IRS says the child tax credit is reduced by $50 for every extra $1,000 of income over the listed threshold for filers.

The IRS encourages everyone to use its Child Tax Credit Update Portal throughout 2021 to make sure it has the most up-to-date information. The agency said it will be adding additional tools to help with the advance payments.

FOX Business contributed to this report.

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