HomePersonal FinanceLatest House Bill Extends Child tax Credit fully as refundable. How will...

Latest House Bill Extends Child tax Credit fully as refundable. How will this benefit Americans?

The signing of the Biden administration’s Build Back Better or BBB bill signifies an increase in the Child Tax Credit. This will make the plan continue through 2022 with the rate of $3,000 to $3,600 of CTC.

The Monthly $250 to $300 will also continue through the coming year. In total 35 million households of our fellow Americans would be eligible to access this assistance.

Read more: Child Tax Credit: Key Requirement Drop Can Pay Out Billions to Illegal Immigrants

The threshold to receive this benefit will remain at $75,000 AGI for Single filers and $150,000 AGI for Couple filing Married Filing Joint.

Prior to the Rescue Plan, 27 million children received less than the full Child Tax Credit or no credit at all because their families’ incomes were too low. That included roughly half of all Black and Latino children and half of children who live in rural communities.

Build Back Better would ensure that families continue to get a significantly expanded Child Tax Credit via monthly payments through 2022.

It would permanently make the full credit available to children in families with low or no earnings in a year, locking in substantial expected reductions in child poverty.

Read more: How the Future of Child Tax Credit Payments in 2022 depends on Biden’s Build Back Better Bill

The expanded credit benefits roughly 9 in 10 children across the country, and already data show signs of success.

The vast majority of parents with low incomes are spending their Child Tax Credit payments on basic needs such as food, housing, utility bills, and education, which can help give their children a stronger start in life.

Altogether Build Back Better’s Child Tax Credit expansions — full refundability and expanding the maximum credit to $3,600 for children under age 6 and $3,000 for children aged 6-17 — are expected to reduce child poverty by more than 40 percent as compared to what it would be without the expansion. Full refundability drives 87 percent of this anti-poverty impact.

Read more: Build Back Better Plan to Expand Child Tax Credit for a Year!

Build Back Better’s Child Tax Credit expansions — especially permanent full refundability — also represent a significant step toward racial equity: they would permanently eliminate a fundamental design flaw in the credit that had the direct effect of ensuring that disproportionate numbers of Black and Latino children received a partial credit or none at all.

Before the Rescue Plan’s expansion, roughly half of Black and Latino children in our country received less than the full Child Tax Credit or no credit at all — compared to roughly 1 in 5 white children — because their families earned too little.

Stay updated with more news here at the East County Gazette. 

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