Joe Biden Is Happy: The Child Tax Credit Will Give You Money Every Month

Joe Biden Is Happy: The Child Tax Credit Will Give You Money Every Month

Parents can collect a $250 or $300 payment each month through the end of the year.

 

Here's What You Need to Remember: Know that the same holds true for the current round of $1,400 stimulus checks—as Congress frustrated many Americans when it failed to exempt the cash from garnishment. Washington lawmakers did, though, approve garnishment protection measures for the $600 stimulus payments that were approved last December.

With summer just around the corner, millions of eligible parents are getting set to receive the newest ‘stimulus’ checks under the American Rescue Plan that will come in the form of the expanded child tax credit

 

Take note that President Joe Biden’s massive $1.9 trillion legislation green-lighted the expansion of child tax credits that generally allowed families to claim a credit of up to $2,000 for children under the age of seventeen.

Now they are eligible to bag as much as $3,600 per year for a child under the age of six and up to $3,000 for children between ages six and seventeen—meaning that these parents can collect a $250 or $300 payment each month through the end of the year. In addition, eighteen-year-olds and full-time college students who are twenty-four and under can give parents a one-time $500 payment.

“For working families with children, this tax cut sends a clear message: help is here,” Biden said in a statement.

Despite this timely cash windfall for many financially struggling parents, there is indeed always that question of whether these funds can be garnished by the Internal Revenue Service or private debt collectors.

Apparently, according to the tax agency, Americans can rest easy knowing that the payments will be protected from both federal and state debts, such as back taxes. However, be aware that they can be garnished for unpaid private debts, such as overdue medical bills and credit card debts.

Keep in mind that a garnishment is a court order that allows for money to be removed from an individual’s bank account—and banks generally must comply with a court’s demands.

As for the child tax credit itself, know that an overpayment of these funds could potentially make the recipient responsible for paying back a portion of these benefits during tax season next year.

Because the disbursement of the money is based off the IRS’ estimates on available data—such as income, marital status, and number and age of qualifying dependent children—any outdated or inaccurate data could trigger an overpayment of the credit.

Be aware that tax refunds for 2020 unemployment benefits will be processed a bit differently. For this, the federal government does have the legal means to use tax refunds to settle overdue debts, such as federal and state taxes, child support, and student loans. And like the child tax credits, the money could potentially be garnished by third-party creditors.

Know that the same holds true for the current round of $1,400 stimulus checks—as Congress frustrated many Americans when it failed to exempt the cash from garnishment. Washington lawmakers did, though, approve garnishment protection measures for the $600 stimulus payments that were approved last December.

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. This article first appeared earlier this year.

Image: Reuters.