Third stimulus check: Millions of parents can expect $300 monthly child tax credits from July – Community News
Stimulus Check

Third stimulus check: Millions of parents can expect $300 monthly child tax credits from July

Editor’s note: The US House of Representatives passed the COVID-19 relief bill Wednesday afternoon. Read here for details.

Tens of millions of American parents can still count on a proposal in President Joe Biden’s $1.9 trillion COVID-19 relief package that will temporarily extend the child tax credit and provide monthly checks of about $300 starting in July.

The US bailout plan, which passed in the US Senate on Saturday and is due to vote in the House of Representatives on Tuesday or Wednesday, extends the credit from $2,000 per dependent to $3,000 per child aged 7 to 17 and $3,600 for any child under the age of 6. The proposal, which originally came from the House Ways and Means Committee chaired by Rep. Richard Neal of Massachusetts, is a move the top Democrats want to make permanent to help reduce child poverty across the country.

“We are now on the cusp of passing landmark legislation in regards to the pandemic while at the same time as economic recovery,” Neal told reporters Monday afternoon before departing for Washington, DC.

Columbia University researchers estimated in October that the pandemic may have left an additional 2.5 million children living in poverty as of May.

Tax credit updates allow it to be advanced to parents in monthly payments of $250 to $300, rather than once a year through their tax return. Children must be 17 or younger, have a Social Security number, and live with the parent for at least six months during the year to qualify for benefits.

According to Kiplinger, if Biden signs the package this week, payments will go from July to December, with parents receiving a total of $1,800 for children ages 7 to 17 and $1,920 for younger children. Parents can declare the rest on their 2021 tax return.

The child tax credit has historically been available to single parents earning $200,000 or less or to couples filing jointly and earning $400,000 or less. The updates approved in Biden’s package gradually enforce the credit for individuals earning more than $75,000 a year or for couples who collectively earn more than $150,000. The $200,000 and $400,000 limits remain in effect.

Another temporary update is the removal of a profit floor; in previous years, taxpayers had to earn at least $2,500 to qualify for the credit.

As with the stimulus checks in previous aid packages, most child support payments will be deposited directly into Americans’ bank accounts according to their information registered with the Internal Revenue Service. The IRS will create an online portal that will allow families to update their income, family and banking information.

On top of the changes in the tax credit, Biden’s plan includes $1,400 direct checks for most Americans; $350 billion to help state and local governments overcome pandemic-related budget deficits; $130 billion to help schools reopen; more than $50 billion to support vaccination and testing efforts; and tens of billions to help small businesses and restaurants hit hard by the pandemic. Supplemental unemployment insurance of $300 a week, due to expire later this month, will be extended until at least September.

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