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The White House has more relief queued up for pandemic-weary families by way of an extended child tax credit.
| Monday, May 17, 2021
(Image courtesy of Pfizer via Courthouse News)

By Brandi Buchman

WASHINGTON (CN) — Funds will start flowing to millions of kids and their families beginning July 15 courtesy of the newly expanded Child Tax Credit, the White House announced Monday.

Though it is temporary, the Internal Revenue Service and the Department of the Treasury will issue advance monthly payments via direct deposit between $250 to $300 for low- to moderate-income families beginning July 15.

Part of an initiative spurred from the Biden administration’s $1.9 trillion American Rescue Plan, which passed earlier this spring, the payments will continue only through December.

Up to $3,000 annually per child can be claimed for families with children between 6 and 17 years old. For those with children under 6, the tax credit is $3,600 annually per qualifying child. Before the rescue plan’s passage in March, the tax credit was only up to $2,000 per child.

Individual parents earning over $75,000 a year, however, will see the enhanced tax credit phased out. And for heads of household earning over $112,500, the same reduction scale applies. Joint filers earning over $150,000 are also not eligible for the extension.

“With today’s announcement, about 90% of families with children will get this new tax relief automatically starting in July. … For working families with children, this tax cut sends a clear message: help is here,” the White House said in a statement Monday.

The White House also noted that eligible families will be able to claim the credit online through a digital portal soon. Missed stimulus payments can also be sorted through the same portal that will be stood up in the days ahead.

Parents will have another separate online portal made available to update bank account information, add or subtract dependents, or opt out of receiving the monthly check and instead take the tax credit in one lump payment next year when they file their taxes. Those details are forthcoming.

Biden’s $1.8 trillion American Families Plan — unveiled in late April and yet to pass — has carved out a line to extend child tax credits through 2025. Democrats on Capitol Hill have mostly lauded the idea but have asked for the president to do more.

“Now that nearly 90% of our nation’s children will benefit from this critical lifeline, we must make this change permanent,” Representative Richie Neal of Massachusetts said Monday. Neal serves as chair of the powerful House Ways and Means Committee.

The Biden administration estimates that almost 40 million households will receive the payment, covering roughly 88% of children in America.

Though massive relief packages may be controversial on Capitol Hill, the U.S. Census Bureau released a report on May 7 showing just one of the benefits of keeping stimulus flowing: Thanks to earlier pandemic relief, in just a few months, hunger in the U.S. has taken a dip from 11% to 8%.

Many Republicans in Washington have balked at the idea of extending the tax credit, arguing it would disincentivize workers, hurt small business bottom lines and potentially upend decades of welfare reform.

In an assessment on childhood poverty by the National Academies of Sciences, Engineering and Medicine released this March, the group noted that when families receive extra help — especially during a global health crisis — children do better not just in the short term but in the long term, too.

“Denying support that can help children thrive because their parents are not currently employed harkens back to inaccurate and racist stereotypes of Black women as “welfare queens” who only had children to receive more assistance and needed to be forced to work,” senior policy analyst Elisa Minhoff wrote in a report for the Center for the Study of Social Policy.

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SCV NewsBreak
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