Democratic legislators intend to continue providing family stimulus checks for years to come, but the concept faces significant challenges. This week, the parents of almost 60 million children will get their third Child Tax Credit payment.
According to census data, the buffed-up monthly stimulus payments are largely used to cover household expenditures and pay off debt and are lifting a large proportion of children out of poverty. The increased Child Tax Credit is set to expire in 2022, but some Democratic legislators are considering extending the larger payments for another three years owing to the program's effectiveness.
Will Child Tax Credit be extended until 2025?
The powerful House Ways and Means Committee's plan unveiled last week also aims to make the refundability provision permanent. However, these reforms may meet opposition in Congress. A simple extension is opposed by Republicans and more budget-conscious Democrats, according to MoneyWise.
In reaction to the plan, members of the Republican Ways and Means Committee issued a statement disputing Democrats' assertions about the efficacy of the Child Tax Credit. Time is running out for parents who have yet to sign up for this year's tax credit as lawmakers debate an extension. Families who missed their first three stimulus payments can get caught up fast if they register by October 4 at 11:59 p.m. Eastern on the IRS Child Tax Credit update page.
Per Business Insider, Americans have been laid off or furloughed in droves during the previous 18 months. During the pandemic, several families struggled to get adequate food for the first time or facing food insecurity. In April 2020, the unemployment rate hit a new high, with millions of Americans relying on unemployment benefits. Around 4 million Americans were deemed long-term jobless by the end of 2020.
The official poverty rate, as assessed by the Census Bureau, increased by 1.0 percentage point. However, according to the Supplemental Poverty Measure (SPM), which includes income such as stimulus checks and government programs, these benefits helped lower the number of Americans living in poverty by 2.6 percentage points in 2020.
Social Security had a significant role in assisting Americans in getting out of poverty. According to Census figures, in 2020, Social Security will raise 26.5 million individuals out of poverty. With the help of stimulus payments, 11.7 million individuals were lifted out of poverty. Although unemployment insurance did not have the same impact as the previous two stimulus payments, it did help 5.5 million individuals get out of poverty.
Stimulus checks helped Americans during the pandemic
In 2020, 37.2 million people lived in poverty, an increase of 3.3 million from 2019. According to the Census Bureau's most recent report, the official poverty rate climbed for the first time in five years. From a low of 10.5 percent in 2019 to 11.4 percent in 2020, the rate has risen.
The American Recovery Act has already put billions of dollars in the hands of taxpayers to aid in the recovery from the coronavirus outbreak. Families with children under the age of 18 will get the third installment of the increased federal Child Tax Credit on September 15, 2021.
This will be the third in a six-part payment series. Direct deposit recipients will receive their funds the same day. People who get money in the form of a physical check will have to wait for it to arrive in the mail.
This round of stimulus checks began in July and will conclude in December. It's the first half of the Child Tax Credit, which is much greater. When families submit their taxes in 2022, they will receive the second half of the money.
This year, Congress increased the maximum tax benefit for each child from $2,000 to $3,600. Families will get $300 for each child under the age of six. Families with children aged 6 to 17 will get $250. Even those who do not earn enough money to submit taxes are eligible for the benefit, as per Fox Baltimore via MSN.