The pandemic hit many American families hard. The difficult financial hits endured by countless households due to the COVID-19 pandemic still linger, even as we hope that the pandemic is nearing its end. Recently, the American government passed The American Rescue plan, which provides additional relief to Americans impacted by COVID-19.
In the rescue plan there is a Child Tax Credit that will be hitting the bank accounts of millions of Americans on July 15, 2021. The Child Tax Credit in the American Rescue Plan is the largest child tax credit in history. Although many families have been receiving $200-$300 monthly per child already, the Child Tax Credit has changed the amounts being dispersed to families.
Under the new Child Tax Credit, families will receive $3,000 for each child over six years old instead of $2,000. Additionally, $3,600 will be given instead of $2,000 to families with children under the age of six. This credit will apply to all households with an income of up to $150,000 for couples and up to $112,500 for single-parent households. In the latter instance, the single parent would be classified as the “Head of Household”. Although iconic, this child tax credit will only be in effect until the end of 2021. However, President Biden is proposing that the credit be extended in his American Families Plan.
The American Families Plan will give more support to American families hit hard by COVID-19, including things such as expanded summer EBT for all children eligible, school meal programs, and assisting with re-entry for incarcerated individuals through SNAP eligibility. These are all aimed at ensuring every American has a fair shot at success in this country, but we are not quite there yet.
Americans will have to wait and see if the newly enacted Child Tax Credit is something that President Biden can maintain for years to come. It is much needed, as thousands of families still struggle to make ends meet due to the effects of COVID-19. For more details visit irs.gov/childtaxcredit2021.