THIRD STIMULUS WORTH ALOT TO FAMILIES

Third stimulus worth alot to families. With the American Rescue Bill now passed into law, it looks like the average family could receive up to $6300 in stimulus money, according to Elaine Maag, research associate at the Urban Brookings Tax Policy Center, who cited the center’s recent report. The relief bil, which includes another round of $1400 stimulus checks, also proposes tax breaks designed to help more families cope with the pandemic. Lawmakers are hoping to deliver stimulus checks and advanced tax credits directly to Americans in the next few months. The Child Tax Credit could be worth up to $3600 per child. One of the American Rescue Plan’s proposals is the expansion of the Child tax Credit. The bill would institute a fully refundable Child Tax Credit for 2021 and increase the maximum amount to $3000 per child ages 6 to 17 and $3600 annually for children under age 6.  Third stimulus worth alot to families.

This would be a major increase from the current CHild Tax Credit, which only provides an annual maximum of $2000 per child from birth through age 16. When Democrats introduced the plan, they outlined a proposal to send the cash out to families monthly. The timeline for sending money out is still unclear, but experts believe the credit would reach families this summer. “The intent is certainly to try to deliver at least a portion of the Child Tax Credit in 2021 rather than when you file your 2021 return, so my guess is they hope to get half of your CTC to you in 2021 and half would come when you file your tax return in 2022, says Maag.

The changes in tax law would mean more Americans would receive aid. “We estimate that the proposal would increase the Child Tax Credit for three quarters of all families”, says Maag. The proposal outlined in the bill is temporary and would only allow eligible families to claim the additional cash for 2021. The American Rescue Plan also includes a refundable Child and Dependent Care Tax Credit, which could help Americans claim thousands of additional dollars to offset costs of child care.