American taxpayers are eligible for a tax credit for each qualifying dependent child they have. The American Rescue Plan Act of 2021 significantly expanded this tax credit, which was created to assist low- and middle-income families in meeting their financial obligations, according to Investopedia.
American taxpayers are eligible for a tax credit for each qualifying dependent child they have. The American Rescue Plan Act of 2021 significantly expanded this tax credit, which was created to assist low- and middle-income families in meeting their financial obligations, according to Investopedia. (Photo: CNET)
Child Tax Credit Extension
As a result of the American Rescue Plan, families could claim all $3,600 for children under six and $3,000 for children 6-17. Households will receive the remainder of the credit when they file their tax returns for the following year after a six-month installment plan began on July 1 and will end in December with an estimated worth between $250 and $300 per kid.
Although the enhanced CTC was included in Democrats’ social spending legislation, negotiations are ongoing as to whether families will continue receiving it after this year. And now, according to The Fool, the Build Back Better Act was recently passed by Democrats in the House of Representatives. This bill would extend benefits for another year.
The House of Representatives passed President Biden’s Build Better Act on Friday. Under this legislation, those payments would continue until 2022. The tax credit would also be made permanently refundable if this proposal were to go through as written. Families will be able to receive the money regardless of whether or not they file taxes, as per WBFF.
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As a result of the American Rescue Plan, families could claim all $3,600 for children under six and $3,000 for children 6-17. Households will receive the remainder of the credit when they file their tax returns for the following year after a six-month installment plan began on July 1 and will end in December with an estimated worth between $250 and $300 per kid. (Photo: GettyImages)
Must Still Be Approved By The Senate
Initially, the goal was to extend this credit through 2025, but as Democrats negotiated the legislation, that proved to be prohibitively expensive. The one-year extension is still welcome news for many families who have come to rely on monthly payments.
Sen. Joe Manchin caused quite the stir by saying that he wouldn’t support the act extension unless there were significant changes to the payments. He fears that the legislation could encourage parents to stay at home and avoid work by providing them with financial incentives. The Build Back Better plan must still be approved by the Senate.
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