Monthly federal child tax credit payments of up to $300 have begun. Here’s what to know.

Families eligible for the enhanced child tax credits started receiving their monthly payments Thursday.

The tax credits — included in the $1.9 trillion American Rescue Plan signed into law by President Joe Biden in March — will provide families with up to $3,600 per child over the course of a year. The first half will go out as direct monthly payments of up to $300 for the rest of 2021. The other half can then be claimed when filing 2021 taxes.

Here’s what to know about child tax credit and the direct payments.

Who is eligible and how the credit works

Eligible families will receive $3,600 overall per child under age 6 and $3,000 overall per child ages 6 to 17.

Single parents earning up to $75,000 a year and couples earning up to $150,000 a year are eligible for the full credit. Benefits are phased out for higher incomes.

The Internal Revenue Service’s Child Tax Credit Eligibility Assistant tool allows families to check if they are eligible.

Families who do not opt out of receiving the direct payments will receive them on the 15th of each month for the rest of 2021 (except for August, when payments will be sent on the 13th).

How to opt out of the monthly payments

Families have the option to forgo the monthly payments and collect the full credit when they file their 2021 taxes.

The deadline to opt out of the first payment was June 28, but families can still opt out of later payments. They need to do so at least three days before the first Thursday of the following month, the IRS says.

Parents can unenroll from the direct payments using the Child Tax Credit Update Portal. Once families opt out of the direct payments, they won’t have an option to reenroll yet.

If married and filing jointly, both spouses will need to opt out, the IRS says, as “unenrolling applies to the individual only.” If one spouse unenrolls and the other doesn’t, they will receive half the joint payment they were supposed to receive with their spouse.

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The IRS says there are several reasons families may decide against receiving the monthly payments.

Parents may want to opt out if they expect the amount of taxes they’ll owe to be more than their expected refund when they file their 2021 tax returns in 2022, the IRS says. The IRS says that by accepting the advance payments, the refund may decrease or the amount owed may increase.

Additionally, opting out of monthly payments may be the best choice for some parents who are separated and alternate who claims their children on their tax returns each year, CNBC previously reported.

Managing the payments

Parents can also use the IRS’s Child Tax Credit Update Portal to update bank account information to decide where the future payments will be deposited.

They can first check if they are eligible for the payments, then confirm if they will receive them through direct deposit. If so, they can see the account they have on file with the IRS, which is where Thursday’s payment will be deposited and where all future payments will be deposited if the account information isn’t changed.

Families can then choose to change which bank account the payments will be sent to, starting Aug. 13. Changes will need to be made by Aug. 2 in order to apply to the Aug. 13 payment and future payments.

The tool can also be used to enroll in direct deposits if they had been set to receive the payments through the mail.

“The IRS urges any family receiving checks to consider switching to direct deposit,” the IRS says. “With direct deposit, families can access their money more quickly. Direct deposit removes the time, worry and expense of cashing a check. In addition, direct deposit eliminates the chance of a lost, stolen or undelivered check.”