The parents of some 60 million children are set to receive their third child tax credit payment this week.
The improved monthly checks are mainly used to cover household expenses and pay debts, according to census data, and are lifting large numbers of children out of poverty.
Now, Democratic lawmakers plan to keep these “family stimulus checks” in place for years to come, but the proposal faces some major hurdles down the road.
The expanded child tax credit was one of the big COVID-19 relief measures included in the $ 1.9 trillion stimulus bill that President Joe Biden signed in March.
Each child ages 6 to 17 can now qualify her family for up to $ 3,000 in tax credits. (That’s more than the previous limit of $ 2,000 for children up to 16 years of age.) Children under the age of 6 can qualify their families for even more, up to $ 3,600.
The credits have also become fully “refundable”, opening them up to families who struggle the most. If the credit reduces a household’s tax burden below zero, you can now receive the negative amount in cash. (Previously, households needed to earn at least $ 2,500 a year for the credit to be repayable.)
Currently, households receive half the credit up front through monthly payments, up to $ 250 or $ 300, during the second half of this year. The rest can be claimed in the form of a tax refund next year.
Early research shows that the first payment alone helped reduce child poverty by 25%, according to the Center on Poverty and Social Policy at Columbia University.
The center adds that if all eligible children are covered by the payments in the future, the credit has the potential to reduce monthly child poverty by up to 40%.
Child tax credit
The expanded child tax credit is due to end in 2022, but given the program’s success, some Democratic lawmakers are looking to extend the larger payments for another three years.
The proposal released last week by the powerful House Ways and Means Committee also seeks to make the rebate feature permanent.
However, these changes may face an uphill battle in Congress. Republicans, and the more budget-conscious Democrats, oppose a simple extension.
In response to the proposal, members of the Republican Ways and Means issued their own statement challenging Democrats’ claims about the effectiveness of the child tax credit.
“Democrats have turned the Child Tax Credit into Jobless Welfare, which if they make it permanent will harm families, risk losing billions of taxpayer dollars to waste and fraud, and cost American jobs,” he says. the notice.
Democratic Senator Joe Manchin of West Virginia also wants to see more eligibility restrictions, telling CNN on Sunday: “There are no job requirements of any kind; there are no education requirements at all for better skill sets. Don’t you think that if we want to help children, people should make an effort? “
Clock is ticking for families to claim payments
As lawmakers debate an extension, time is running out for parents who have not yet signed up for early payments this year.
Families who missed their first three payments can get up to speed quickly by logging into the IRS Child Tax Credit Update Portal to register before 11:59 p.m. Eastern on October 4.
Instead of having half of the credit divided into six installments, it will be divided by three. Families will receive a trio of payments of $ 500 for each child ages 6 to 17, and payments of $ 600 for children under the age of 6.
The portal will only be available until mid-October, so families who don’t sign up by October 15 will have to wait to receive their payment until they file their taxes next year.