It is illegal for financial institutions, creditors, and debt collectors in California to seize the child tax credit payments that were featured in President Joe Biden’s coronavirus rescue package, according to the state’s attorney general.
“The pandemic has been tough on families across California,” California’s Attorney General Rob Bonta said in a statement on Tuesday. “The Child Tax Credit payments should be a bright spot for our families, putting money in their pockets as the country begins our recovery. No parent should go to bed worried that these payments will be seized by some debt collector.”
Bonta noted that Californians who are eligible for the enhanced child tax credit will not have to give up their pandemic aid to debt collectors and financial institutions due to Gov. Gavin Newsom’s (D) executive order passed last year that “sought to ensure that COVID-19 assistance funds reached their intended recipients in full and weren’t withheld by debt collectors,” according to a press release.
Biden’s $1.9 trillion relief bill expanded the $2,000 child tax credit to $3,000 for children between the ages of 6 and 17 and $3,600 for children under the age of 6. The money will be sent out on a monthly basis, with the first payments going out on July 15.
“It’s the same reason why stimulus check payments have not been touched by credit card companies or student loan companies, or other groups,” Edgar Rivas, a California banker and financial consultant told the California Globe on Tuesday. “This money is still direct relief and can’t be touched. Bonta said what he did today because there were questions as to whether this was COVID related or covered under that executive order, plus, many groups are national, and many states don’t have this kind of protection. He gave the equivalent of a papal bull saying to pretty much back off of them on this.”
Those who are eligible for the child tax credit include individuals earning up to $75,000, as well as joint filers making up to $150,000 and heads of households earning up to $112,500. The amount will then drop by $50 for each $1,000 in income above these caps.
After July 15, the IRS will issue payments on August 13, September 15, October 15, November 15, and December 15.
“Not only is the Child Tax Credit good for several more years to come, but the way that it is all worded essentially means that many families will have guaranteed income that cannot be taken away for debts,” Rivas told the publication. “Now, wages can still be garnished, and any funds not protected by Executive Order can still be taken. In fact, garnishments may now go up and debt collectors can have a few more avenues open now because of the additional funds going into bank accounts. It will look like they are making more, so they can try other things.”
Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report, and The Hill.