New Coronavirus Stimulus Plan Could Give Parents $3,600 Per Child Each Year
Help could be on the way for parents through monthly payments, with plans to expand child tax credits put forward from both Democrats such as President Joe Biden and Senate Republican Mitt Romney.
President Joe Biden campaigned on the promise to provide significant help to American families. Now, his new coronavirus stimulus plan could mean up to $300 per month for parents, according to new legislation being drafted by House Democrats.
The proposed plan would send $300 each month to parents for every child under the age of 6 and $250 each month for every child between ages 6 and 17. That would be a total of $3,600 for each child under age 6 and $3,000 per year for each older child.
Utah Senator Mitt Romney recently put forward a plan that goes one step further: He is advocating for $4,200 each year for kids up to age 6 and $3,000 each year for kids 6 to 17.
How Would It Work?
The payments (in both Romney's and Biden's plans) would come from expanding child tax credits, meaning parents would receive monthly payments from the Internal Revenue Service (IRS). And unlike the one-time payments, this program would continue for an entire year—and maybe even longer, according to The Washington Post.
In effect, Biden's plan would reduce the amount of money parents pay in taxes, paying them back the $3,600 or $3,000. The Democrat's plan would allow families to choose whether to receive a lump sum with their tax returns or monthly payments in installments.
Currently, the child tax credit offers single parents making less than $200,000 up to $2,000 per child and the same for married couples making less than $400,000 filing together. So the changes would mean an increase of about $1,000 for many families—or even more with Romney's plan.
However, child tax credits currently leave many families out. Biden also hopes to give a break to the millions of families who don't earn enough money to use the credit. He previously said he wants the child tax credits to be "fully refundable," which would allow these families to receive the benefit.
How Would It Help?
Nearly a year into the pandemic, families are struggling. The cost of daycare has increased and many parents have either lost their jobs or been forced to leave the workforce to care for children who are virtually learning. And until a Biden stimulus plan goes into effect, the U.S. is still one of the only countries not providing monetary support (in addition to traditional unemployment benefits) to those financially affected by the virus.
New research on the proposed plan has suggested that the plan could cut child poverty in half in the United States. And since the U.S. has 11 million children living in poverty—and one of the worst rates of child poverty compared to other countries with similar wealth—that would be an impactful change. Reducing the number of children in poverty by up to 54 percent (like the research suggests it could) would mean bringing 5 million children out of poverty.
What Happens Next?
Under Biden's plan, these payments would be one part of the $1.9 trillion economic relief package. Romney's plan, however, would fund the payments to families by cutting welfare programs such as Temporary Assistance for Needy Families and other existing tax credits.
However, neither plan is final yet and just in the initial drafting stage. In order for any of this to go into effect, the bills would have to pass through Congress. However, House Democratic leadership says they're aiming for the bill to be approved by the end of February. So parents can watch to see which proposals make it into the final draft—and contact their representatives in Congress to see if they support expanding the child tax credit or other coronavirus stimulus plans.