Upon his inauguration, President Joe Biden approved the $1.9 trillion American Rescue Plan, which was the third and final stimulus package designed to tackle the COVID-19 crisis.
This law temporarily increases the child tax credit for the 2021 tax season from $2,000 to $3,000 per dependent ages 6 to 17 and for children 5 and under from $2,000 to $3,600.
Unlike the previous year, approximately half of the funds will be distributed by means of monthly checks of $250 or $300 between July and December.
Democratic leaders in Congress are working to extend the benefit into 2022, even before the next payment is due (the last two payments are Nov. 15 and Dec. 15).
A massive reconciliation bill worth $1.75 trillion is being debated by the slim Democratic majorities in the House and Senate.
According to this latest update of the Build Back Better plan, child tax credits of $3,000 and $3,600 would be extended for another year.
It was the president’s aim to promote the benefit till 2025; however, that ambition was curtailed when the Democrats decided to reduce the bill’s overall cost from more than $3 trillion to $1.75 trillion in an effort to appease members.
White House officials had said that if the bill is signed into law, $250 and $300 would go out monthly in 2022.
A total of 35 million households with children would be covered by this program.
This tax credit would have the same eligibility requirements as the 2021 expanded child tax credit.
The credit would be available to single filers earning less than $75,000 per year and couples filing jointly earning less than $150,000 per year.
It will be a challenge passing this bill through the Senate, where Democrats only hold a 50-50 split by virtue of vice president Kamala Harris’ tie-breaking vote.
Some Senate Democrats are yet to respond to the Build Back Better framework, including Kyrsten Sinema (D-Ariz.) and Joe Manchin (D-W.Va.).
“There’s no work requirement [with the expanded child tax credits] whatsoever…Don’t you think, if we’re going to help the children, that the people should make some effort?” Manchin asserted the previous month.