Check your bank account: Parents can get up to $300 a month per child in tax credits

OAKLAND, Calif. - Millions of Americans started receiving the child tax credit from the IRS on Thursday morning. 

The monthly payments are part of President Biden's American Rescue Plan, signed into law earlier this year. 

The U.S. Treasury department said 39 million American households, covering 88 percent of children will get these payments.

"This has the potential to reduce child poverty the way social security reduced poverty for the elderly," said President Joe Biden.

Couples who earn up to $150,000 a year and single parents, who earn up to $75,000 a year are eligible to get this tax credit.

They will get $300 per child, per month, for children younger than 6 years old and $250 per child for children between 6 and 17 years old.

Eligible tax-payers received their first payment Thursday, with payments being deposited into your account on the 15th of every month, through December.

Parents are thrilled.

"High quality childcare is simply out of reach for working families like mine," Roshonna Booker, a Seattle mother said. "But my husband's income alone doesn't cover our expenses because I'm in school right now. The child tax credit is a huge relief for us. The extra $300 a month would mean so much for my family. It would go straight to diapers, baby food, rent and bills."

Tax experts noted that the payments are essentially advance payments of estimated tax refunds for 2021.

"In a systematic way - on a schedule, once a month," said Caroline Chen, assistant professor of tax at San Jose State University. "To give low-income families a regular payment, to be able to use in a regular fashion for the needs of the family."

Chen said that also included in the American Rescue Plan is a significant increase in the amount of money families can get for a dependent care tax refund when they file their 2021 taxes. That credit is now up to $8,000 per child instead of $3,000.

"It'll be a larger amount of expenses you can claim for the credit," she said. "The credit can go to reduce your taxes to zero, and then if there's any left over, the government will pay you."

South Bay Congressman Ro Khanna tweeted that about 30,000 families in his district,  which includes Fremont, Milpitas, Sunnyvale and parts of San Jose, will receive a monthly payment, starting today. South Bay families will receive an average of $2,300 this year.

Biden said he supports making these child tax credits permanent, through 2025. 

But it will take further action from Congress to make that happen.

The IRS up a web portal, where you can add or update bank account information. You can also use the portal to add any children born in the latter half of 2021.

The IRS up a web portal, where you can add or update bank account information. You can also use the portal to add any children born in the latter half of 2021.

The payments are based on 2020 income, so if you're making more money now than you were last year, you may want to opt-out of the program or end up having to pay back money next year.