On July 15, most Vermont parents will begin to receive a new monthly payment from the federal government, as part of the COVID-19 relief signed into law in March.

This new monthly payment system is a revision to the existing child tax credit, which was first enacted in 1997. Usually, parents have received a lump sum in their spring tax returns.

The per-child credit was previously scaled on a bell curve, dependent on household income, with lowest-income and highest-income families receiving the smallest returns. Until this year, the maximum credit was $2,000 per child.

The American Rescue Plan, which President Joe Biden signed into law in March, changed this law in a couple of ways. It increased and standardized the amount — to $3,600 for every child under the age of 6 and $3,000 for each child between ages 6 and 17.

It also changed the schedule of these payments. Now instead of just one sum, half this money will be advanced and sent to families in increments each month from July to December. This comes out to a monthly payment of $300 for each child under 6 and $250 for each child ages 6 to 17.

“Our job was to do something that was really essential — only Congress could do it because the federal government has the fiscal flexibility and fiscal capacity to provide resources,” Rep. Peter Welch said Tuesday at a press conference in Barre. “But the hard work was how do you then take those funds and have it be translated into real help to real people?”

Liz Scharf, director of community economic development at Capstone Community Action in Barre, said the change was profound in that it made the funds accessible to Vermonters who had no or little earned income. She pointed to examples such as people receiving Social Security or disability benefits, or single mothers who have stayed home for a couple of years with their new children.

“This will generate thousands of dollars to families who in the past have never been eligible to receive this credit,” Scharf said.

The IRS will determine eligibility for the monthly payments from 2020 tax filings and will distribute the payments the same way it did for this year’s tax returns — either direct deposit or a check in the mail.

Households who did not file for a 2020 tax return can register through an IRS online portal.

Scharf notes that this system may make it more difficult for low-income families or parents without driver’s licenses to register for payments to which they’re entitled. She and other Capstone staff members urge families in this situation to reach out for assistance registering.

“I haven’t figured out how that’s going to work, but I’m pretty tenacious,” said Laura Sudhoff, who offers tax assistance at Capstone. “Believe me, I will make it work.”

Becky Coleman, a Head Start teacher in Barre with two young children, said next week’s tax credit “is going to be huge” for her family.

“Traditionally, I use that tax refund and wait for it every year and have to put it toward whatever big purchase. Last year it was bunk beds. I had to wait to buy bunk beds for them,” she said. “But having it month-to-month would allow me to save faster and make those purchases.”

She said the first payment will likely go toward a new clothes dryer since hers recently broke. If the monthly payment system continues in the future, Coleman hopes to put it toward extracurricular activities for her kids that she otherwise couldn’t afford.

Welch said he believes there’s a good chance this monthly payment system could become a permanent part of the tax code as it has received bipartisan support.

“A lot of my Republican colleagues have folks who this makes a huge difference for their families. So this is not about who you voted for. It’s about what our kids need,” Welch said. “At the end of the day, I am hopeful we can make this permanent.”