COVID-19 Relief Package Provides Families $3,600 per Child

(Photo : Getty Images/Drew Angerer)
WASHINGTON, DC - MARCH 10: Speaker of the House Nancy Pelosi (D-CA) gives a thumbs up as she presides over voting on coronavirus relief package H.R. 1319 in the House Chamber of the U.S. Capitol on March 10, 2021 in Washington, DC. In a final vote, the House passed U.S. President Joe Biden's revised $1.9 trillion COVID-19 relief bill, named the American Rescue Plan, in the administration's first major legislative achievement.

President Joe Biden's $1.9 trillion COVID-19 relief bill has passed Congress. It includes a change to the tax code that Democrats have lauded as a tool to combat child poverty. However, Republicans have condemned this as "welfare."

$3,600 Child Tax Credit

Under such legislation, the American Rescue Plan, families could claim up to $3,600 per child under 6 years old and $3,000 for children up to 17 years old for one year. This will reportedly help tackle the economic damage of the pandemic. House Democrats seek to make the tax change permanent.

When the upcoming $1.9 trillion relief plan becomes law, Americans will be anticipating their $1,400 stimulus checks. However, White House officials have made it apparent this week that they are just as focused on another provision in the sprawling bill which could prove to be a more stout expansion of the government's social safety net, reported Yahoo Finance.

One of the most crucial provisions is the expansion of the child tax credit (CTC) that will take effect this year. The improved portion of the credit will be available for single parents with yearly incomes up to $75,000 and joint filers earning up to $150,000 annually, reported CNN.

Under the current law, most taxpayers could diminish their federal income tax bill by up to $2,000 per child. The package would bolster the tax break to $3,000 per child age 6 to 17 ($250 per month) and $3,600 for every child under 6 ($300 monthly).

The sitting president looks forward to signing the bill into law this week. The Internal Revenue Service (IRS) and Treasury are working to ensure that Americans will receive payments out this March, reported the White House.

Also Read: COVID-19 Relief Package: Are You Eligible for a Third Stimulus Check?

The COVID-19 relief package will provide $1,400 stimulus checks to the majority of Americans. It also includes the aforementioned enhanced child tax credit that some have called historic.

The legislation makes the benefit fully refundable. Low-income families will be qualified for the full credit. For the first time, it shifts a portion of the credit to cash payments, which will provide families a direct line of relief.

The proposal of the bill is not new. It is an expanded version of a pre-existing measure.

The American Rescue Plan would also enable families to receive the funds "periodically" instead of merely yearly during tax season. This increase in the CTC would diminish child poverty by 40 percent, indicated by a report from the Center on Budget and Policy Priorities.

The $1.9 trillion relief plan made its way through the House of Representatives on Wednesday. The party-line vote was 220-211.

The child tax credit would also let families receive the funds "periodically." It is currently disseminated yearly during tax season.

The president supports a permanent extension of the credit. According to White House press secretary Jen Psaki the previous week, he would be open for opportunities to do that.

The tax credit now is up to $2,000 per child. The amount included in the bill is a significant increase from the current amount, which has been in effect since a Republican-led tax overhaul in 2017.