Topline
During prepared remarks in Pittsburgh on Monday, Vice President Kamala Harris praised the temporarily expanded child tax credit as one of the significant parts of the Biden Administration’s $1.9 trillion pandemic relief effort—here’s everything you need to know about the credit, which will start hitting bank accounts next month.
US Vice President Kamala Harris speaks about the Child Tax Credit and economic recovery at the … [+]
Key Facts
The credit will provide eligible families with up to $3,600 for every child under age 6 and up to $3,000 for every child ages 6 through 17.
Half of that money will be paid out monthly (on July 15, August 13, September 15, October 15, November 15 and December 15) and the rest that a family is eligible for can be claimed on tax returns next year.
A single parent who earns up to $75,000 a year is eligible for the full credit, parents filing as heads of household get the full credit up to $112,500 a year as do married couples filing jointly with up to $150,000 in income.
The American Rescue Plan also made the credit fully refundable, meaning that eligible families can receive the full benefit even if they don’t earn enough money to owe income tax.
Crucial Quote
“The proudest moment that I have experienced in this position was when President Joe Biden signed the American rescue plan into law,” Harris said during prepared remarks on Monday. “Because through tax credits and food assistance, and housing assistance, and health care coverage and direct checks, the American Rescue Plan….will lift half of America’s children out of poverty.”
Key Background
Eligible families that filed a 2019 or 2020 tax return or registered for a stimulus check do not need to take any action and will automatically receive the credit, either by direct deposit or by mail if the IRS doesn’t have bank account information on file. Last week, the IRS announced that eligible parents who don’t normally file tax returns can use its updated Non-Filers tool to register to receive advance monthly payments under the CTC. But the website is difficult to use for many lower-income families that need it, according to a recent report from HuffPost: it is reportedly not easily accessible via mobile devices, requires an email address and is only available in English. There is not yet a way for parents to determine eligibility, check payment status or opt out of the advance payment program online—those features will come online as part of a different tool in the next several weeks, according to the IRS. Because the advance payments are based on income from 2020 while the credit itself is based on income from 2021, some families that earn significantly more this year than they did last year might actually receive more in advance child credits than they’re ultimately eligible for. If that’s the case, they may want to opt out of the advance payments to avoid having to repay the excess to the IRS next spring.
Big Number
39 million. That’s how many households will see payments under the newly expanded CTC starting in July, Harris said Monday.
What To Watch For
Harris said lawmakers are working on a way to extend the expanded credit beyond 2021. Biden’s proposed American Jobs Plan, if enacted by Congress, would extend the credit for five years but many progressive lawmakers want to make the expansion permanent. “I don’t know if we’ll be able to do that, it costs a lot of money,” House Speaker Nancy Pelosi (D-Calif.) said during a virtual event on Monday,” but it’s well worth the price and the value that we receive for our children.”
Further Reading
IRS Opens Child Tax Credit Payment Registration Portal For Non-Filers—Here’s What You Need To Know (Forbes)
IRS Releases Child Tax Credit Payment Dates—Here’s When Families Can Expect Relief (Forbes)
Expanded Monthly Child Tax Benefit Will Begin Hitting Bank Accounts July 15 (Forbes)
Democrats Have A Plan To Slash Child Poverty, But It Goes Through A Shoddy Website (HuffPost)
