Will I be able to apply for a third stimulus check and $3000 child tax credit?
Parents across the country could see a lot of help coming their way if the American Rescue Plan Act 2021 passes, with stimulus checks and child tax credits.
President Joe Biden's $1.9 trillion covid-19 relief package took another key step towards passing through Congress when the House approved the bill in the early hours on Saturday. Among the many measures for helping struggling American families was a new round of increased $1,400 stimulus checks and tax credits to help families. The enhanced Child Tax Credit could see parents receiving up to $300 per month per child in direct payments starting in July.
With these two programs households could see as much as $3,200 per child under the age of 6 and $2,900 per child 17 and under before the end of 2021. Then when they file their tax return in 2022, they could claim the remainder of the child tax benefits from the enhanced child tax and other tax credits for children. Although the tax provisions are temporary and will only apply to the 2021 fiscal year, Democrats would like to make some of these measures permanent.
Who will benefit from the tax provisions?
On average the new coronavirus relief bill would reduce household federal tax bills by an average of $3,100 each this year, according the Urban-Brookings Tax Policy Center. The tax savings for individuals would come from four major provisions in the legislation. The $1,400 stimulus payments, which are technically an advance tax credit, the expanded child tax credit, an expanded income tax credit and a boost to the tax credit for those paying for child care.
Most of the tax relief from the House proposal would go to low- and middle-income families according to the Tax Policy Center analysis. Households earning less than about $91,000 a year would receive about two-thirds of the benefits. But more well-heeled families would get some relief, too. About 11% of the benefits would go to the highest 20% of families, those earning at least $164,000.
The tax provisions in the American Rescue Plan Act 2021
The enhanced child tax credit would expand the credit from $2,000 to $3,600 for children under 6 and to $3,000 for children under age 18 for 2021. More low-income parents could take advantage of the child tax credit under the House plan with the $2500 earnings floor removed. Half of the credit would be paid to families in advance through direct payments beginning in July with the remainder coming as a refund in the 2021 income-tax filing in 2022.
With the enhanced Child Tax Credit included in the American Rescue Plan — which is based on my American Family Act — we can cut childhood poverty in this country by 45%.— Michael Bennet (@SenatorBennet) February 21, 2021
@SenSherrodBrown and I have been working on this for years. Let's get it done. pic.twitter.com/F3Kifyv7Tv
Parents, and now more non-parents, will benefit from changes to the Earned Income Tax Credit (EITC). The plan calls for raising this credit for childless adults from about $530 to $1,500 and lowering the eligibility age to 19 (except for students, 24, and qualified former foster youth or homeless youth, 18) while eliminating the maximum age. It also raises the income threshold for the credit.
Under the new bill the child and dependent care credit is increased and made refundable for 2021.The amount of the credit is based on a percentage of the child care expenses you incur on days worked to enable you and your spouse to earn income. The bill increases the amount of expenses that families can claim for a qualifying child or other dependent under the age of 13. For one child a family can now claim expenses up to $8,000 and $16,000 for two or more children. The percentage of expenses that can be claimed for the lowest-income earners increases from 35% to 50%.
Recommended in English
- NBA Juancho recalls tough times at Boston: "There was no room for me"
- NFL PFWA selects three Chiefs for All-Rookie Team Honors
- Soccer Real Madrid's Rodrygo wants World Cup glory with Brazil
- AFCON Mané taken to hospital after head injury blow at AFCON
- NFL Lakers 106 vs. 96 Nets summary: stats, scores, and highlights | NBA
- MLB Big Papi only player elected to Hall of Fame