WASHINGTON (NewsNation Now) — President Joe Biden signed the $1.9 trillion COVID-19 relief bill Thursday and Americans could start to see relief hitting their bank accounts as soon as this weekend, the White House said.
Among the relief: $1,400 stimulus checks and a raise in the child tax credit. The American Rescue Plan temporarily raises the child tax credit, now at a maximum of $2,000, to as much as $3,600 per child annually.
The plan also expands the credit so it’s fully available to the poorest families, instead of restricting it based on the parents’ tax liability. And it will be paid out in monthly installments, to offer families struggling during the pandemic a more consistent lifeline.
Here’s what we know about the child tax credit expansion:
- Child tax credits are not new. Parents have previously received the benefits at tax-filing time.
- For this year only, Democrats have proposed increasing the benefit from $2,000 per child to $3,000 per child. Parents of children under age 6 would be eligible for an even larger $3,600 total credit.
- The plan would also include $3,000 benefits to the parents of 17-year-olds who meet plan qualifications. Previously, children had to be 16 or younger.
- Regular check distribution would begin no sooner than July and would be an advance on up to half of the total benefit. So a family receiving the benefit for one child under the age of 6 would see $300 monthly payments for six months. Between 7 and 17, the benefit would be $250 monthly, if approved.
- The added payments this year would begin phasing out for couples making over $150,000, and couples making over $170,000 would see no added benefit, according to the New York Times.
- As in previous years, single filers making under $200,000 and married filers making less than $400,000 would still be eligible for the $2,000 payments.
- The frequency of the checks containing the first half of the payment is not yet solidified. The Treasury Department will determine how frequently checks can realistically be distributed.
- The remaining half of the credit would still be claimed when taxes are filed.
- The credit would be refundable, meaning you could still get the credit even if you don’t end up owing taxes.
- Some Democrats have called for making the payments permanent.
In pushing the credit, Democrats have said this change — in conjunction with stimulus payments, child care credits and other relief for parents in Biden’s proposal — could reduce the number of children living in poverty by more than half, a claim based on a study by the Center on Poverty and Social Policy at Columbia University.
The Associated Press and Nexstar Media Wire contributed to this report.