The American Rescue Plan Act of 2021 aims to aid the country’s economic and health recovery following the devastating effects of COVID-19. With a price tag of nearly $2 trillion, this economic rescue package will be one of the most expensive in US history. President Joe Biden signed the American Rescue Plan into law in March, and it has since distributed hundreds of millions of dollars to the people of the United States.
The Child And Dependent Tax Credit
If you have a child or a dependent, you may be eligible for up to $8,000 under Joe Biden’s American Rescue Plan, one of the less-talked-about initiatives. According to MARCA, this tax credit is designed to help families who have additional expenses because of being parents or caregivers. Although it could take some time to check the paperwork, families may receive their money in time for the holidays.
When taxpayers pay for child care out of their own pocket, they are eligible for the Child and Dependent Care Credit. The credit is available to individuals and their spouses who are caring for a qualifying child or a disabled dependent while they are working or looking for work. All eligible expenses are subject to a different tax credit percentage depending on one’s income level.
According to CNBC, before, families could deduct up to $6,000 worth of expenses, with each dependent being allowed to claim up to $3,000 in expenses. On the other hand, the American Rescue Plan increased the eligible costs for 2021 to $8,000 per dependent, with a cap of $16,000.
The Child and Dependent Care Tax Credit stimulus check is available to families making less than $125,000 per year. According to The Sun, care expenses for an official dependent child who is under the age of 13 may be reimbursed up to $8,000 per year. 50 percent of qualifying expenses up to $16,000 are reimbursed for the care of two children under 13 or official dependents. In addition, families earning between $125,000 and $183,000 a year can claim up to 20 percent of their annual income in Social Security benefits.
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