To date, more than one hundred sixty million $1,400 coronavirus stimulus checks under President Joe Biden’s American Rescue Plan have been sent out to help heal Americans’ financial pain over the course of the pandemic.
But it appears that Biden believes that even more financial assistance is needed—as he seeks to push ahead with the American Families Plan, which is expected to further extend the child-tax credit provided by the $1.9 trillion legislation.
If this is eventually green-lighted, it could potentially give parents and legal guardians a total of up to $16,200 of cash per child. And those with children living at home could receive a monthly $300 check per each child through the end of 2025.
The plan is anticipated to cost around $1 trillion and would be paid for in part by tax increases on wealthy Americans.
Currently, several Democratic lawmakers are urging the president to make the expanded child tax credit permanent.
“Expansion of the child tax credit is the most significant policy to come out of Washington in generations, and Congress has an historic opportunity to provide a lifeline to the middle class and to cut child poverty in half on a permanent basis,” they said in a recent statement.
The American Rescue Plan already has expanded upon the child tax credit that generally allowed families to claim a credit of up to $2,000 for children under the age of seventeen.
That benefit now has been extended to lower-income families who otherwise wouldn’t receive such a credit. They are eligible to claim as much as $3,600 per year for a child under the age of six and up to $3,000 annually for children between six and seventeen.
This means for a family headed by a couple earning less than $150,000 or an individual making under $75,000, they are eligible to get a $250 or $300 monthly payment.
The Internal Revenue Service, though, has warned that some recipients of the tax credits may have to pay back a portion during tax season next year. The legislation directs the federal government to issue advance payments of the child tax credit in periodic installments, which are based off the agency’s estimates on available data like income, marital status, and number and age of qualifying dependent children.
Know that any outdated or inaccurate data may trigger an overpayment of the child tax credit and that the impacted individual will be responsible for any difference in the amount.
More financial help can come in the way of other tax credits that have been extended for another year to help offset the cost of child care.
Families potentially could get back as a tax credit as much as half of their overall spending on child care for children under the age of thirteen, up to $4,000 for a single child, and $8,000 for two or more children.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.