Under the current stimulus proposal, families with children and older adults could be eligible for new tax exemptions that could bring in thousands more dollars.
Sarah Tew / CNET
While you already know President Joe Biden $ 1.9 billion stimulus plan include a third stimulus test from to $ 1,400 per eligible person, did you know that there are other ways your family can get more money from the proposed account? Congress is currently in the process of getting the U.S. Rescue Plan (PDF) approved. Here’s what’s included: a major extension to the child tax credit, more access to affordable early childhood care, money for aging and disability services, and an increase in the maximum earnings tax credit for adults, including older workers.
Until a bill is signed by Biden to become law, none of these provisions are guaranteed and may change at any time. According to the Washington Post, Biden is also expected to include more provision for child and parent care.
Here’s all we know now about what the plan currently contains in terms of benefits for children and older adults, and how your family could see thousands of dollars in tax benefits this year. (We broke out all the other ways your family can get more incentive money this time too.)
How much money can my family receive for my children after my third stimulus check?
The U.S. bailout plan includes several provisions aimed at lowering child poverty rates in the U.S., which could add some cash to some families this year. These include:
Stimulus looks at dependents. Under the current bill, dependents of any age (including children, young adults or older adult family members) is eligible for up to $ 1,400 each in stimulus payments. This money will not come in the form of their ‘own’ checkhowever, but will instead be added to the total of the household.
Extension of the child tax credit. Parents can usually claim a CTC of up to $ 2,000 on their tax for every child under 17. The U.S. bailout plan stipulates that families with children 17 and under will receive a $ 3,000 credit, while those with children under 6 year does receive a $ 3,600 credit. It also makes the credit fully repayable, and also removes the dollar capitalization and the earnings limit that currently prevents many low-income families with children from receiving the full credit, according to the Center for Budget and Policy Priorities. (Read more details about the changes on child tax credits here.)
Extensive tax credits for childcare. To make childcare for families more affordable, the plan offers a tax credit on childcare for children under 13 – up to $ 4,000 for one child or $ 8,000 for two or more children. The credit is repayable and available to families earning less than $ 125,000 a year. Those earning between $ 125,000 and $ 400,000 will receive a partial credit (find out what your adjusted gross income is here). The plan also calls on Congress to provide funding to keep child care centers open and to improve wages and benefits for child care workers.
Look at this:
Stimulation test no. 3: What you need to know
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What types of money or tax cuts does Biden’s plan for older adults contain?
The U.S. rescue plan includes funding for programs aimed at helping older adults financially as well. These include:
Stimulus look at older adults, dependents included. Under the current bill, older adults (including recipients of SSI or SSDI benefits) are eligible for a third stimulus test of up to $ 1,400, when they meet admission requirements. This includes older adults listed as dependents tax on someone else, even though their share of the stimulus money is added to the total amount of the household. (Find out all the rules around stimulus tests for older adults.)
Extension of the earnings income tax credit. This tax credit is designed to benefit people with lower incomes, and can reduce your taxable income and wages. According to Biden’s plan, the credit for childless adults will be increased from about $ 530 to $ 1,500 and the income limit for the credit from $ 16,000 to $ 21,000. It will also expand the appropriate age group, eliminating the age limit for older workers. And if your earnings fall in 2021 due to the pandemic, your credit will not be reduced. (Find out more about how to claim the earnings income credit this year.)
More funds for aging and disability services. The U.S. rescue plan includes additional funds for aging and disability services programs, but does not go deep into exactly where the money would go.
For more information, find out how a third check can give your family more money, en when the IRS could send the third stimulus check.