The fact that the US economy has improved to such an extent that a fourth stimulus check is unlikely is actually a good thing. But many people don’t see it that way.
It’s easy to overlook the fact that while some people’s finances actually improved during the pandemic by spending less but earning no less, others struggled tremendously with loss of income, racking up dozens of debts in the process. And it’s people in that latter group who may have really counted on a fourth incentive payment ending up in their bank accounts.
But while a fourth stimulus check may not happen anytime soon, that doesn’t mean Americans don’t have options for getting their hands on more money. Here are three things that can take the place of a follow-up stimulus round.
1. The Increased Child Tax Credit
This year, the child tax credit is worth up to $3,600 for children under 6 and up to $3,000 for children aged 6 to 17. Previously, it was only worth $2,000.
Half of the credit is paid in the form of monthly installments starting in July and continuing through December. The credit is also fully refundable, so if a recipient doesn’t owe any taxes, they can get all of their money anyway.
Lawmakers are fighting to keep the increased version of the child tax credit for another year, and if they get their way, a higher credit in 2022 could help make up for an absent stimulus check. In addition, legislators are working to keep the fully repayable nature of the credit permanent. Previously, only part of it could be repaid.
► Child tax credit gave the typical family $5,086: Will Congress extend it for 2022?
2. The Improved Earned Income Tax Credit
Just as the Child Tax Credit has seen its value rise, the Earned Income Tax Credit (EITC), a credit for lower incomes, has also been given a boost this year. Now lawmakers are fighting to keep the upgraded version for another year.
Not only is the EITC worth more money, but it is now available to more people through temporary eligibility changes. And the credit is also fully refundable – although it’s worth noting that it has always been that way.
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3. A side job
You may not qualify for the Child Tax Credit or EITC, but that doesn’t mean you run out of options to get a bonus payday. While you can’t count on a stimulus check, you can can increase your income by taking a part-time job. Today, many companies are looking for people, especially because of the holiday rush. And if you’re able and willing to put in the time, you could make more money than a fourth stimulus check would have paid you.
While it may be disappointing to have to write off a fourth stimulus check in the short term, the reasons are good. And if lawmakers have their way, two key tax credits will remain worth more money in 2022, despite initially only increasing them for 2021.
► Financial planning at the end of the year: How to Prepare for Biden’s Proposed Tax Changes
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