$3,000 third stimulus check per child: are children of 17 and 18 included?

Democrats are to introduce a proposal, which is to be attached to the next stimulus package, providing eligible households with $3,000 for each child. While much of the early reaction has been positive, a number of questions are being asked regarding qualifying criteria.

$3,000 cash payments for children: are 18-year olds eligible?

The 22-page bill was reported on early on Monday by the Washington Post, who state that qualifying households would get a credit of $3,000 for every child aged between six and 17.

Children under the age of six, the proposal continues, would be eligible for a payment of $3,600, but any child 18 and above would not be entitled to anything. The scheme is set to start in July of this year and continue for a full calendar year.

Rather than a one-off payment, what is actually a tax credit would be sent out by the Internal Revenue Service (IRS) in $250/$300 monthly checks.

Single parents on up to $75,000 and couples on under $150,000 would be eligible for the full amount, with gradually decreasing payments also available to those whose earnings exceed those income thresholds.

Tax credit: what is it anyway?

A tax credit is a sum of money taxpayers can subtract from the amount of tax they owe a country's inland revenue. It can be refundable, allowing you to claim the full credit even if it is more than your tax bill, or non-refundable, which limits what you get to no more than the tax you owe. A key aspect of Democrats' proposed child tax credit is that it would be refundable, so claimants can receive the $3,000/$3,600 in full even if they pay less in taxes.

Expanding the child tax credit available to families is a major part of President Joe Biden’s American Rescue Plan, a $1.9tn coronavirus relief package unveiled in the days before he took office in January.

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Child tax credit: what is currently in place?

Currently, individuals earning under $200,000 a year and married couples on under $400,000 a year are able to claim a child tax credit of $2,000 per year for children aged 16 and under, unless that amount is more than the tax they owe, in which case they can seek an alternative credit of up to $1,400.

'Refundable' child tax credit: millions out of poverty

According to the Center on Budget and Policy Priorities (CBPP), making the $3,000/$3,600 child tax credit fully refundable would see 27 million more children qualify, having missed out on the current credit, or only been eligible for a partial amount, because they belong to low-earning families who do not pay enough tax.

The CBPP has also said that an expanded child tax credit would lift more than three million people in the US, including two million children, over the poverty line.

"The pandemic is driving families deeper and deeper into poverty, and it's devastating," said Ways and Means Committee chairman Richard Neal, who has headed up the drafting of the new child tax credit bill, in a statement released to the media.

"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."

Passing child tax credit a Democratic challenge

Republicans such as Mitt Romney have proposed similar initiatives, but Democrats are expected to face significant GOP pushback over the credit. According to the Post’s Jeff Stein, Republican opposition to such aid going to both working and non-working families "has set the stage for a major political clash".

Although Democrats are preparing to push Biden's stimulus plans through Congress without Republican support by using the 'budget reconciliation' process in the evenly-split Senate, the Post says it is not clear whether the rules of the upper chamber allow them to pass the child tax credit via reconciliation.

Third stimulus check: live updates

You can get the latest updates on the proposed third stimulus check, and other mooted aid measures such as the expanded child tax credit, by following our dedicated live blog.