President Joe Biden on Thursday touted the expanded child tax credit, a provision of his administration’s Covid-19 relief package aimed at reducing child poverty that he believes could change the lives of working-class families.
“This can make it possible for a hardworking parent to say to his or her child: ‘Honey, we get, you can get your new braces now. We can get you a tutor to help you in the math class you’re having trouble with. We can get you the sports equipment you need to sign up for your first team you’re going to play on,'” Biden said from the White House.
The first monthly installment of the enhanced child tax credit — up to $300 a month for each child under age 6 and up to $250 a month for each one ages 6 to 17 — arrived in parents’ bank accounts on Thursday.
Families will receive a total of $3,600 for each child under age 6 and $3,000 for each one ages 6 to 17 for 2021. Half will be paid in monthly installments between now and December, and rest will come next spring, around Tax Day, Biden said.
The vast majority of families — roughly 39 million households, covering 88% of children — will get the credit automatically because they filed 2019 or 2020 returns claiming the credit. Families that file taxes electronically should see payments in their accounts Thursday that say “CHILD CTC,” while those who haven’t provided their direct deposit information should expect checks in “several days,” an administration official said.
The full enhanced credit will be available for heads of households earning $112,500 and joint filers making up to $150,000 a year, after which it begins to phase out.
For many families, the credit then plateaus at $2,000 per child and starts to phase out for single parents earning more than $200,000 or married couples with incomes above $400,000.
The beefed-up credit is only in effect for 2021.
Biden also highlighted that the enhancement Congress passed as part of the American Rescue Plan in March makes the credit fully refundable so that more than 26 million low-income families who didn’t qualify for the full credit previously can now get it.
“To give you a sense of how transformative this is: This would be the largest ever one-year decrease in child poverty in the history of the United States of America. Historic reduction in child poverty among white, Black and Latinos and AAPI communities,” the President said, mentioning the Asian-American Pacific Islander community. “The benefits will be felt for years.”
Low-income families that haven’t filed tax returns recently or used the non-filer tool last year to get their stimulus checks can use an IRS portal to register to receive the enhanced child tax credit. The sign-up tool allows users to provide the necessary information about their households and, if they choose, their bank accounts so the agency can directly deposit the funds.
Biden pointed these families to childtaxcredit.gov, a White House site, for more information.
“For the first time in our nation’s history, American working families are receiving monthly tax relief payments to help pay for essentials like doctor’s visits, school supplies, and groceries,” Treasury Secretary Janet Yellen said in a statement Wednesday evening. “This major middle-class tax relief and step in reducing child poverty is a remarkable economic victory for America — and also a moral one.”
Biden took a moment to praise Democratic lawmakers who worked on the relief plan measure, including Rep. Rosa DeLauro of Connecticut, and castigate Republicans for not voting for the it.
The first payment comes as Biden’s sweeping social agenda clears a crucial hurdle. Senate Democrats on the Budget Committee announced Tuesday that they’d reached an agreement on a $3.5 trillion budget resolution, including spending for Biden’s social proposals. The agreement is expected to extend the enhancement for several years, but the duration is not yet known.
The President urged lawmakers not to let the beefed-up credit expire after this year, noting the nation can afford it by “making people at the top and big corporations” pay their fair share of taxes.
“We shouldn’t let child poverty continue to stay in the conscience or drag down our economy,” he said. “And so I say to my colleagues in Congress, this tax cut for working families is something we should extend, not end, next year.”
This story has been updated with additional developments on Thursday.
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