Even as millions of monthly child tax credit payments go out, some parents are still confused how they work

About 36 million America families have received a second batch of monthly child tax credit payments worth about $15 billion.

Yet a survey from personal finance website MagnifyMoney finds that many Americans are still confused about how the payments work.

Those who were most likely to lack clarity were parents with lower incomes. The survey found 26% of parents who earn less than $35,000 and have children younger than 18 did not know whether they were eligible.

Additionally, the survey found that half of parents who are eligible are uncertain as to whether they will have to pay the money back come tax time.

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The new advance monthly child tax credit payments were authorized when Congress passed the American Rescue Plan Act in March. The first two checks were sent out in July and August. Additional payments are scheduled to go out each month for the rest of the year.

The advance monthly payments amount to $300 per child under 6 and $250 per child ages 6 to 17.

In total, the child tax credit was raised to $3,000 to $3,600 per child from the existing $2,000 for qualifying families. The full credit is available to married couples with up to $150,000 in adjusted gross income and single parent families with up to $112,500.

Half of the full sums are set to arrive via the monthly payments, while the rest can be claimed when parents file their tax returns next year.


Child tax credits are coming to millions of U.S. families
Admittedly, those terms might trip up some parents, starting with the idea of how this tax credit works.

Unlike the three sets of stimulus checks, which were essentially free money, the advance monthly child tax credit payments will be counted on your tax returns, said Matt Schulz, chief credit analyst at LendingTree, which owns MagnifyMoney.

“There are a lot of people who were super-excited to get these tax payments that may not be as thrilled with them when it comes time to file their taxes next year,” Schulz said.

Parents who are worried that the monthly checks could increase what they owe come tax time may want to opt out of the payments.


Low-income families can still sign up online to receive the monthly payments, according to the IRS. However, some might be hesitating because they’re afraid they could lose other government benefits or face consequences for not having filed previous tax returns.

Those fears are unfounded, Dorian Warren, co-president of Community Change, a Washington, D.C.-based advocacy group, recently said.

“There’s so much money,” Warren said. “It’s just sitting there on the table.”

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