MID-MICHIGAN (WJRT) - President Joe Biden’s first major legislative win is now in motion.
He signed the $1.9 trillion dollar American Rescue Plan into law on Thursday, featuring $1,400 stimulus payments to most Americans. The White House says that money could start hitting bank accounts this weekend.
Another item guarantees parents of children under age 18 some form of income. Millions of parents will benefit from the plan’s revamped Child Tax Credit, but a tax professional said they need to understand big changes to the popular program.
Beginning in July, millions of parents across the country could start to receive monthly Child Tax Credit payments as part of the American Rescue Plan.
“If your child is under 6, the payment is $300 per child per month. And if your child is 6 to 17, it’s $250 per child per month,” said Marlena Curtis, a tax professional in Flint.
She said that works out to $3,600 for the year covering children under 6 and $3,000 for the year covering children age 6 to 17. The Child Tax Credit usually totals $2,000 for each child age 17 and younger, so it is increasing by 50% to 75% for this year.
Those funds could potentially start going out in July and run through December with January through June payments coming as a lump sum with 2021 income tax returns filed next spring.
Under the American Rescue Plan, single parents who make $75,000 or less or joint tax filers who make less than $150,000 can take advantage of the full benefits.
“People are still hurting. There’s a lot of people who haven’t received a single unemployment payment, but that’s still money that they are owed. They still have bills,” Curtis said.
For now, these changes to the Child Tax Credit are temporary for one year. There are no strings attached to this money, meaning it can be used for food, child care or anything else a family needs.
Curtis said the difference between the Child Tax Credit balance still owed at tax time in 2022 will be refunded if it exceeds what parents owe in income taxes. The new provision also allows those who are not employed to claim the credit.
“COVID is still out there and alive, but at the same time I think this is the greatest thing. It’s awesome,” Curtis said.
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March 13, 2021 at 07:00AM
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Tax professional explains major changes to popular federal Child Tax Credit - ABC 12 News
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