$3000/$3600 child tax credit: who would qualify in the new stimulus bill proposal?
President Biden's American Rescue Plan includes $1.9 trillion to provide economic support, but the federal funding will not be available to everyone and entitlement depends on a number of factors.
In a bid to help address the widening wealth gap in the United States, President Joe Biden’s covid-19 stimulus bill includes a number of measures aimed at providing immediate financial relief to those who are most vulnerable during the pandemic.
One such proposal is a huge expansion of the child tax credit system, which is provided to parents and legal guardians to assist with the cost of raising children. The new child tax credit provision could see the federal government provide up to $3,600 a year for each eligible child, distributed in the form of a monthly direct deposit.
Would I be eligible for the child tax credit increase?
Full details of the American rescue Plan relief package have been obtained by the Washington Post, who outline exactly what the new-look child tax credits could look like. They report that qualifying household would receive up to $3,600 a year for children under six, and up to $3,000 a year for those aged between six and 17.
The 22-page bill also sets out the eligibility requirements: single parents who earn less than $75,000 and joint-filers who earn less than $150,000 would be entitled to the full amount. Above these thresholds, the amount you are able to receive would be gradually phased out.
The programme currently in place is not refundable, meaning that claimants who pay little or no tax are limited to a lesser amount. At a time when millions have lost their jobs due to the pandemic this was seen as counter-productive, and this has been removed for the new bill.
The Center on Budget and Policy Priorities (CBPP) have said that by making the new child tax credits fully refundable an extra 27 million children, primarily from low-income households, will be able to get the full amount. They add that this expansion could lift more than three million Americans, including two million children, out of poverty.
What effect would an increase in child tax credit have on the US economy?
In recent weeks progress on Biden’s American Rescue Plan has been slowed by the need to approve the President’s cabinet selection and the Senate trial of former President Trump. Now that the trial has been concluded lawmakers in Washington will hope to get on with the matter of agreeing the stimulus bill.
The stimulus bill is aimed at supporting those worst-hit by the economic fallout of the pandemic, but many Republican lawmakers have criticised the proposal. Senator Marco Rubio of Florida said recently that the proposal is “not a pro-family policy, no matter how much Democrats will claim it to be.”
He added: “If pulling families out of poverty were as simple as handing moms and dads a check, we would have solved poverty a long time ago.”
The proposal edged a step closer to reality on Thursday when the House Ways and Means Committee voted in favour of a $940 billion chunk of federal funding to include both child tax credits and another round of stimulus checks.
"The pandemic is driving families deeper and deeper into poverty, and it's devastating," said Richard Neal, chairman of the Ways and Means Committee after the vote had been made public.
"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."