• Child tax credit checks included in latest virus stimulus bill to start coming in July,

The $1.9 trillion COVID-19 relief law Congress passed and President Joe Biden signed in March gives families that qualify for the federal child tax credit a boost in the credit for the 2021 tax year — and the option of collecting some of that money early.

The plan is to give families an advance on the funds in the form of monthly installments paid by the federal government starting in

July. That’s a departure from the usual lump sum refunds that come once a year at tax time.

An online portal the Internal Revenue Service is planning to roll out will give parents the option of choosing whether they need the money this year or would rather wait until 2022.

The monthly payments — representing an advance on half of the taxpayer’s expected 2021 credit amount — would come out to six monthly payments of $250 per month for each child age 6 to 17; and $300 a month per child under age 6.

For many families, the pandemic has created unexpected financial challenges and the rule, which only applies to the 2021 tax year, is meant to help.

“People who qualify for this child tax credit are usually struggling to pay for things like child care, or buying food, diapers, formula and clothes,” said J. Victor Conrad, owner of Pinnacle Financial Strategies in Pine.

“This benefit could go a long way in helping these families out with these daily expenses,” he said.

“Some might even take advantage of maybe paying down any expensive high-interest debt or replenishing their very prudent emergency fund.”

The expanded child tax credit for 2021 is $3,000 per child from ages 6 through 17; and $3,600 for children under age 6.

Under the previous law, the tax credit was $2,000 per child under the age of 17. The new law raised the amount of the credit and increased the age limit to under age 18.

The credit reduces the tax bill on a dollar-for-dollar basis for taxpayers who report less than $150,000 per year on joint returns; $75,000 for single filers; and $112,500 for head of household.

Households with multiple children can look forward to a substantial sum of monthly income from the government.

For example, a family with three children ages 12, 7 and 5 could collect $800 per month from the IRS from July through December for a total of $4,800 — half of their 2021

child tax credit. The family would then claim the remaining $4,800 when they file their 2021 tax return next year.

The American Rescue Plan made the child tax credit fully refundable. Previously, taxpayers could only get up to $1,400 of the credit in the form of a tax refund.

Taxpayers also only got the refund if they had at least $2,500 of earned income. Now, a family can receive the full amount of the credit as a refund and there is no earned income threshold, which could help more low-income people qualify.

“Some people with low incomes don’t need to file a tax return for federal tax purposes. But they are filing now because it puts them on the radar for receiving the enhanced child tax credit,” said Elizabeth “Li” Connolly, a partner at the Connolly Steele & Co. accounting firm in Avalon.

Married couples earning less than $24,800 and single people earning less than $12,400 are not required to file federal tax returns in the general course of things, but the various stimulus programs have made it worth their while.

Ms. Connolly said many people who don’t normally file a return were encouraged to do so last year to receive a recovery rebate credit in lieu of the advance stimulus check.

“If they filed a return in order to receive the recovery rebate credit, then they will be on the radar already for the enhanced child care tax credit,” Ms. Connolly said.

While the enhanced child tax credit phases out at $150,000 for married couples filing jointly, couples with income too high to qualify for the enhanced child tax credit can still qualify for a $ 2,000 tax credit per child under the old system as long as their adjusted gross income is below $400,000.

Pittsburgh financial adviser Ashby Daniels believes the increased tax credit may offer an opportunity for some families to jump-start their savings.

“Because this credit is supposed to arrive monthly, recipients may consider setting up an automatic savings transfer to make good use of the money,” said Mr. Daniels, an adviser at Shorebridge Wealth Management on Washington’s Landing.

“Establishing good habits right away with these newfound funds will go a long way toward establishing a sense of financial security that many families so richly deserve,” he said.