It's well known that raising children is an expensive endeavor. But parents will soon see more financial help thanks to Democratic efforts to expand a long-standing antipoverty program via the president’s $1.9 trillion stimulus bill. A measure within the bill, which is expected to be signed by the president sometime this week, will temporarily expand the current Child Tax Credit rule to at least $3,000 per child in an attempt to bolster families’ financial security amid the ongoing coronavirus pandemic.
"The pandemic is driving families deeper and deeper into poverty, and it's devastating," Rep. Richard Neal, one of the legislators leading the bill's creation, told CNN in a statement. "We are making the Child Tax Credit more generous, more accessible, and by paying it out monthly, this money is going to be the difference in a roof over someone's head or food on their table."
What Is The Child Tax Credit?
Enacted in 1997 to help families offset the high costs of raising children, the Child Tax Credit is, along with the Earned Income Tax Credit, considered to be one of the nation's largest anti-poverty programs. Following its expansion in 2001, the Child Tax Credit enabled parents to claim a tax credit of up to $2,000 per child under the age of 17. Additionally, dependent children aged 17 to 18 and full-time college students age 19 to 24 can claim a nonrefundable $500 credit. Should the claimed credit exceed the taxes a parent owes, they can receive a refund of up to $1,400 per child 17 or younger.
How Much Will Families Receive & When Will The Money Arrive?
When Biden signs his $1.9 trillion stimulus package into law later this week, eligible families will, for one year only, receive $3,600 per each child under the age of 6 and $3,000 per each child age 6 to 17, according to The Washington Post. But when those payments roll out to eligible families is a slightly different story.
While the third round of stimulus checks may begin to roll out as early as late March, parents will likely have to wait a few more months for expanded Child Tax Credit payments to be distributed. According to CNN, families aren’t likely to see the tax credit until July and can opt for one lump sum or for monthly payments of $300 or $250, depending on the child's age.
The expanded Child Tax Credit is also fully refundable under Biden’s stimulus package, meaning families who opt for monthly payments can claim the remaining six payments on their 2021 tax return. Parents can calculate how much they might receive using the Washington Post’s Child Tax Credit calculator.
Who's Eligible?
To be eligible for the full amount of the expanded Child Tax Credit, single parents must not have earned more than $75,000 in 2020. For married couples filing jointly, the income threshold is $150,000, according to The Post. Similarly, head of household filers have an income threshold of $112,500.
Individuals with incomes higher than $75,000 but below $200,000 would still be able to claim the traditional child tax credit of $2,000 per child, according to Kiplinger. Additionally, joint filers with an annual income of between $150,000 and $400,000 would also claim the unexpanded credit.
What Does The Expanded Benefit Mean For Children?
Expanding the Child Tax Credit even temporarily could have serious benefits for some of the nation’s most vulnerable children. Researchers at Columbia University have said proposals to increase the Child Tax Credit could reduce the number of U.S. children currently living in poverty by as much as 54% or 5 million children, The Post reported. When looking specifically at Black children, a group previous research has found to be twice as likely to be in poverty than non-Hispanic white children, researchers at Columbia found more than one million Black children would be lifted out of poverty by expanding the Child Tax Credit.
Could The Bigger Benefit Become Permanent?
Although Biden’s stimulus package only expands the Child Tax Credit for one year, some legislators have called for making the increase in benefits permanent. According to CNN, Reps. Rosa DeLauro, Suzan DelBene, and Ritchie Torres have introduced a standalone bill that would permanently raise the Child Tax Credit to $3,000 per child. They hope to capitalize on recent support for Biden’s temporary expansion and cement a more permanent boost to the benefit.
"We cannot stop here. We must use this moment to pass the American Family Act and permanently expand and improve the child tax credit," DeLauro told CNN. "One year is not enough for the children and families battling not just the coronavirus, but poverty, too."
0 comments:
Post a Comment