Over the past month, the Internal Revenue Service and U.S. Treasury have worked around the clock to disburse nearly one hundred sixty million coronavirus stimulus checks under the American Rescue Plan.
It appears that even more help is on the way for financially struggling Americans.
According to IRS Commissioner Chuck Rettig, the agency will begin sending out monthly payments from the new $3,000 child tax credit in July. The $1.9 trillion legislation 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. Families are now 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.
“We will launch by July 1 with the absolute best product we are able to put together,” Rettig told the Senate Finance Committee earlier this week.
But he admitted that launching a new program poses unique challenges, stating that “we will not risk our system.”
To ensure their families receive the payment, parents must file a 2020 tax return. Without a tax return, the IRS will not have the information it needs to deliver the credit. There is also no limit on the number of children in a family that can receive the credit, as long as they meet the eligibility requirements regarding age and income.
The full credit is available to those who have children and adjusted gross income (AGI) of less than $75,000 or $150,000 for a married couple filing jointly. The benefit will phase out for individuals who make more money and cease completely for those earning $95,000 and married couples making $170,000.
This means that a family of four making less than $150,000 could get their hands on more than $14,000 in pandemic relief this year.
For those who are recently unemployed, they can claim $300 in additional weekly unemployment benefits, which include a brand-new tax break. Under the legislation, these enhanced federal unemployment checks can be applied for till September 6, and the maximum amount of time you can collect is roughly a year.
The American Rescue Plan also discards a particular provision that you have to make $2,500 annually to receive the tax credit. In addition, the legislation makes the credits fully refundable.
Furthermore, tax credits have been extended for another year to help cover the cost of childcare. Families potentially could get back as a tax credit as much as half of their overall spending on childcare 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.