Iowa families will start getting child tax credit checks this week. Here's how it works.

July 8, 2021
In The News

Most Iowans with children will start seeing checks hit their bank accounts and mailboxes soon as an expanded child tax credit kicks in.

U.S. Rep. Cindy Axne spoke Thursday morning at Grace Preschool in Des Moines to tout the benefit, which President Joe Biden signed in March as part of the American Rescue Plan, the federal government's latest COVID-19 stimulus measure.

"I’ve seen the burdens that are placed on working families across Iowa when it comes to raising children," said Axne, a Democrat. "And what’s going to happen is this child tax credit is going to bring support to 85% of Iowa families. That’s huge."

The federal action increases the existing child tax credit from $2,000 to $3,600 for children under age 6 and to $3,000 for children under age 18.

Instead of paying the credit as a lump sum after someone files their tax return, the federal government will begin paying the money out to qualifying families in monthly installments starting on July 15.

Jason Burkhiser Reynolds, whose 3- and 5-year-old children attended Grace Preschool, said the money will help his family pay car expenses so he can get the kids to school and allow them to start saving for college.

"It’s really just an opportunity to take that burden off of us a little bit each month to help support our kids for the future," he said.

While the expanded tax credit is currently scheduled to expire after December, Axne said she supports making it permanent. She said she also hopes to see support for child care included in the infrastructure legislation Congress is considering.

Who qualifies for the child tax credit? And how much is it?

Iowans with children qualify for the child tax credit if their household income is less than $112,500 for a single tax filer or less than $150,000 for a married couple filing jointly.

Axne said more than four out of five Iowa households with kids will be eligible to receive the tax credit. That's about 193,000 families and about 647,000 Iowa kids.

Families will receive payments of $300 per month for children ages 0 to 5 years old, and $250 per month for children ages 6 to 17 years old.

Recipients of the tax credit will receive the second half of the funds when they file their 2021 tax return.

The average benefit of the tax credit will be about $2,800 over the course of the year, according to an estimate provided by Axne's office. The expansion is expected to lift more than 21,000 Iowa kids out of poverty, according to the estimate.

The tax credit is now fully refundable, meaning if families owe less in income taxes than the amount they receive through the child tax credit, they will receive a payment for the difference, according to a White House fact sheet.

What do I have to do to sign up?

Iowans who paid taxes last year or signed up for a stimulus check through the IRS should receive the tax credit automatically.

Those who didn't file tax returns in 2019 or 2020 and didn't receive a check from any of the rounds of federal COVID-19 stimulus packages can go to childtaxcredit.gov to sign up.