The House of Representatives passed the $ 1.9 billion Covid-19 relief package on Saturday, which included a temporary increase in the child tax credit.
The U.S. House Rescue Plan increases the child tax credit for 2021 to $ 3,000 per child aged 6 to 17 and $ 3,600 per year for children under the age of 6. The improved payments, specifically to teens who are 17 for the first time, cover, would start phasing out for individuals earning more than $ 75,000 a year, or $ 150,000 for the married filing jointly.
There is already a child tax credit that provides $ 2000 per child. When Americans file their taxes, they can claim the credit for children under 17. The current credit is based on income, and those who earn more than $ 200,000 ($ 400,000 for married couples filing jointly) will see how the credit gradually phased out. If taxpayers’ credit is higher than their tax due, they can get up to $ 1400 in repayment.
The home account approved on Saturday will increase the credit amount by $ 1,000 ($ 1,600 for those with children under 6) and allow taxpayers to receive the full amount as repayment for 2021. Families not eligible for the new $ 3,000 credit due to higher adjusted gross income. could still claim the credit of $ 2000 per child. In addition, the credit would be payable in monthly installments of $ 250 and $ 300, respectively, rather than just once a year.
“The coronavirus pandemic has not only shed light on child poverty, it has exacerbated it and strengthened the need – and urgency – for the expansion and improvement of child tax credit,” Rep. Rosa DeLauro, D-Conn., In a statement. “We have known for a long time that this change would dramatically reduce the poverty of children, with sustained benefits for children and their families.”
The amendments to the U.S. bailout plan on the child tax credit will reduce child poverty by about half, according to the Center for Law and Social Policy. Poverty among black children is expected to fall by 52%, while that among Spanish children will fall by 45%, according to CLASP. “If made permanent, these improvements will have multi-generational, positive consequences,” the organization said in a statement.
Under the new provision, the treasury advance payments can extend up to half of the 2021 child tax credit from July based on the tax return information for families of 2019 or 2020. If there is an overpayment of the credit, individuals who have less than $ 40,000 earned ($ 60,000 for couples submitting jointly) does not repay the amount and will also not be adorned with wages.
Several Democrats, led by DeLauro, supported a proposal that would make the improved payments permanent, but the language did not make it into the final version of the House legislation.
In addition, Sen. Mitt Romney, R-Utah, last month proposed a similar tax credit that is slightly broader for younger children (up to $ 4,200 per year for children under 6) and longer than the child credit proposed as part of the $ 1.9. trillion relief package. However, to compensate for the cost of the increased tax credits, Romney suggests eliminating a number of other family-oriented programs and credits.
The House version of the U.S. bailout plan will now go to the Senate, which is expected to vote on the package before March 14.
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