$3,600 stimulus check per child: will there be IRS monthly payments in the summer?
With millions of families in the United States falling into poverty, many anxiously await their enhanced Child Tax Credit.
More than 2.5 million children have fallen into poverty since May 2020, according to the Children’s Defense Fund. These children are disproportionately Black and Latino and experts are have vocalized their concerns about the long-term consequences that even short stays in poverty can have children and their families.
For months, as the benefits families saw from the CARES Act began to expire in July, lawmakers failed to reach a compromise on additional stimulus. This failure was a major blow to child welfare advocates who cited study after study analyzing the increase in poverty and highlighted the need for government action in the form of direct cash payments, increases in SNAP benefits, enhanced unemployment benefits.
Child Tax Credit expanded as part of American Rescue Plan
Substantive help for families would not come until March, nearly a year later, with the passage of the American Rescue Plan (ARP). The ARP made historic changes to the Child Tax Credit, making it fully refundable and increasing the value of the benefit to $3,000 for those with children over six and $3,600 for those under six. In addition the legislation,
• - Extended SNAP (food stamp) benefits through 2021;
• - Provided direct cash payments of $1,400 to eligible adults and children; and
• - Extended the unemployment benefits eligibility period to September 2021 and provided a $300 a week topper in addition to the amount provided by the states.
Researchers examining the impacts this legislation could have on child poverty rates estimate that the percentage of children living in poverty could be cut in half.
This notable drop would be primarily motivated by the Child Tax Credit, but this relief has yet to reach families in the United States. The United States has had a Child Tax Credit on the books since 1976, but the American Rescue Plan modernizes its distribution. Rather than the credit being claimed as a lump sum during tax filing season, the plan allows the IRS to send monthly payments to families, boosting their monthly income and helping them to cover basic needs and expenses.
When will Child Tax Credit payments be sent?
At the time of the bill’s passing, the US tax authority, the Internal Revenue Services, was not adequately prepared to send this type of payment. There is no official date announced for when the payments will start but the IRS and lawmakers have marked July as the deadline for the first checks to be sent.
In testimony made before the Senate Finance Committee, Commissioner Chuck Rettig stated that his agency is on track to have the online infrastructure needed to make these payments in place by July.
How much can families expect to see in July?
Families can expect $300 per child for children under six and $250 per child over six. There are no limit on the number of children eligible to be counted as long as a family’s income falls under the established cap of $75,000 for a single filer or a joint income of up to $150,000 for married couples. For example, a family meeting the income requirements who have three children, one older than six and two younger would be eligible to receive $850 a month between July and December. To receive the remaining credit, families will make a claim when filing their federal income taxes in 2022.
Are efforts being made to make the changes to the Child Tax Credit permanent?
Yes. Congressional and Senate Democrats have advocated that the credit be extended beyond 2021. Next week, President Biden may unveil a third major piece of legislation, the American Families Plan, which forms part of his Build Back Better economic agenda. The details of what will be included in the plan are not final but some have reported that an extension of this program will make it into the final draft.
Te recomendamos en English
- TAX SEASON 2021 IRS unemployment refund update: how to track and check its state
- CORONAVIRUS STIMULUS CHECKS How filing a tax return could help you get third stimulus check plus-up payments
- PERSONAL FINANCE Who qualifies for the Earned Income Tax Credit (EITC) in California?
- Serie A Pirlo: Cristiano Ronaldo happy to be substituted
- REAL MADRID Zidane to leave Real Madrid at the end of the season
- LA GALAXY ‘Chicharito’ Hernández scores his seventh goal of the season in MLS