IRS says 88% of US families will get a bigger child tax credit
How much will your family receive? Read below to calculate.
LINCOLN, Neb. (KLKN)- According to Monday’s announcement from the IRS and the U.S. Treasury Department, the majority of American families with children will automatically receive up to $300 per month per child starting July 15.
The families who can qualify for the Child Tax Credit were expanded by President Biden in his $1.9 trillion American Rescue Plan. According to the IRS, those qualifying families will receive monthly payments without taking any further action. Initial eligibility will be based on 2019 or 2020 tax returns.
The changes made increased the Child Tax Credit from $2,000 to $3,000 for kids over 6 years old and to $3,600 for kids under 6. To find out what benefits your family is eligible for, go to the COVID-19 relief calculator.
In White House remarks, Biden announced “they should know a new tax cut will be coming their way.”
Biden said that the change is part of his belief that the tax system “should work for the middle class.”
“That’s why I think we should ask corporations and the top 1% to start paying their fair share, and why we should crack down on millionaires and billionaires who escape taxes by cheating,” Biden said. “But I also think we need to give ordinary families a break, a tax break, to help them with the cost of raising their kids.”
Biden urged Congress to keep the enhanced tax credit, which is only applicable for 2021 taxes.
“The American Rescue Plan is delivering critical tax relief to the middle class and hard-pressed working families with children. With today’s announcement, about 90% of families with children will get this new tax relief automatically, starting in July. While the American Rescue Plan provides for this vital tax relief to hard-working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come,” Biden said. “For working families with children, this tax cut sends a clear message: help is here.”
For the remainder of 2021, direct payments will be made on the 15th of each month, coming in a day before or after if it falls on a holiday or a weekend.
Another big change to the credit is that it is now refundable, which means that families get checks throughout the year, instead of waiting until after they’ve filed taxes.
“Here’s the great news: you won’t have to wait until your next year’s tax return to get that break,” Biden said. “I’m announcing today that, on July 15th and the 15th of every month thereafter, throughout the year, you will get deposited in your bank account half of your tax cut at least, $250 per child each month, a direct deposit into your account.”
According to a report released in March by the nonpartisan think tank, Center on Budget and Policy Priorities, the expanded tax credit would “lift 9.9 million children above or closer to the poverty line including 4.1 million Latino children, 2.3 million Black children, and 441,000 Asian American children.”