The American Rescue Plan Act of 2021 aims to help the country recover from the devastating effects of COVID-19 on the economy and health of the United States. One of the most expensive in US history, this economic rescue bill costs nearly $2 trillion.
Child Tax Credit
When Congress passed the American Rescue Plan in March, the Child Tax Credit was raised to $3,600 for children under the age of 6 and $3,000 for those aged 6 to 17. As a result, the way in which Americans were credited changed. According to Newsweek‘s report on the child tax credit, a one-time payment has been replaced by monthly payments totaling $300 for children under the age of six and $250 for all other eligible children.
It is scheduled to distribute half of the total credit amount in the months of July through December 2021 into bank accounts. These payments have already been distributed to most eligible parents, who should receive the final one in December. According to The Fool, half of the credit will be available in 2021 when the tax returns are filed, and the other half will be available in 2022 when the tax returns are filed.
According to MARCA, the IRS relies on previous tax returns to determine which households are eligible for the enhanced credit. The federal agency will automatically make monthly payments to you unless you choose to opt-out. People who did not file a tax return for the previous year must take steps to ensure that the IRS has their information.
The enhanced Child Tax Credit, which has been paying families monthly since July, will be extended under the Build Back Better framework, according to AS. In the event that the White House had hoped for a two-year extension, the tax provision’s full-refund status will not be abolished permanently.
The vast majority of families are not required to take any action in order to receive their benefits. A large number of low-income families who do not usually file tax returns are now eligible to receive the credits for the first time because they have been made entirely refundable.
Read Related Article: $8,0000 Stimulus Check Is Coming After Thanksgiving