American families with children will start getting substantial monthly payments from the government starting July 15 to help with the costs of raising their kids, and it’s all thanks to the Biden-Harris Administration and the Democrats, who voted in a Coronavius relief bill last March.
On March 11, President Biden signed The American Rescue Plan Act of 2021, also known as the COVID-19 Stimulus Package, into law. Most people know it as the bill that made the government send out $1,400 Coronavirus relief checks to Americans earlier this year, but there is another vastly important part of the Act that will start benefitting American families very soon.
Section 2 of the Act changes the rules regarding the Child Tax Credit to speed financial relief to most working American families.
What is the Child Tax Credit?
The Child Tax Credit is a reduction in people’s yearly tax bill that the government gives those who are raising children to help with the high cost of raising kids. Normally people only get this credit when they file their tax returns for the previous year, but the American Rescue Plan changed this so people don’t have to wait and will start getting this financial benefit in monthly payments starting July 15, 2021.
The American Rescue Plan also raised the Child Tax Credit from $2,000 to $3,000 per child for kids over six years old, and from $2,000 to $3,600 for children under six, and raised the age limit for receiving the credit from 16 to 17.
If you are a couple with kids making a combined household income of up to $150,000, or a single parent making up to $112,500, you are eligible to receive the payments.
All Senate Democrats voted for the American Rescue Plan to speed this financial relief to struggling families. All Senate Republicans voted against it.
You can see who voted for and against the measure here.
What do you have to do to get the money?
Most families won’t have to do anything to get their child tax credit payments. If you took deductions for your kids on your 2019 or 2020 tax returns, or if you have already received a Covid-19 economic impact payment from the government, then you’ll get the child tax credit payments automatically.
The IRS will send the funds out automatically by direct deposit or mailed check.
If you haven’t made enough money to file a tax return — for example if you’re under 65 and made under $12,400 last year — or if your income is similarly so low that you haven’t had to pay taxes, you can still get the Child Tax Credit by using the Child Tax Credit Non-Filer Sign-Up Tool to tell the IRS where you are and let them know you have qualifying children. After all, this relief is intended to help the country’s neediest, lowest-income families, and the IRS can’t send the money to people if they don’t know where they are!
How much money will you get?
For every child 6-17 years old, families will get $250 each month, and for every child under 6 years old, families will get $300 each month.
The 80% who get their refunds from the IRS through direct deposit will get these payments in their bank account on the 15th of every month until the end of 2021.
People who don’t use direct deposit will receive their payment by mail around the same time.
So if you have two kids, one 5 years old and the other 8 years old, you’ll get $550 each month.
Right now, the monthly Child Tax Credit payments will be made from July, 2021 until December, 2021, but President Biden wants to extend the payments for many years to come. To do this, he proposed another bill, the American Families Plan, to extend the payments and add even more benefits to help Americans, like universal preschool, expanded child care nationally and four years of free post-secondary education.
The American Rescue Plan’s Child Tax Credit is expected to lift millions of American children out of poverty, and it’s all thanks to the Biden-Harris Administration and Congressional Democrats.
Let’s hope we can keep it going next year.