New Coronavirus Stimulus Plan Gives Parents $3,600 Per Child Each Year
Parents of children under age 6 will receive up to $300 a month and parents of kids ages 6 to 17 will receive up to $250 a month for the next year—or even longer.
President Joe Biden campaigned on the promise to provide significant help to American families. Now, his new coronavirus stimulus plan will deliver up to $300 per month per child for parents, according to new legislation being drafted by House Democrats.
The president's stimulus package recently passed, totaling $1.9 trillion in coronavirus aid. And the package includes an expansion of the child tax credit that would benefit almost all American families. Each month, parents of children under the age of 6 will now receive $300 and parents of kids ages 6 and 17 will receive $250. That's a total of $3,600 for each child under age 6 and $3,000 per year for each older child.
How Does It Work?
The payments come from expanding child tax credits, meaning parents would receive monthly payments from the Internal Revenue Service (IRS). And unlike the one-time coronavirus payments, this program would continue for an entire year—and maybe even longer, according to The Washington Post.
In effect, Biden's plan reduces the amount of money parents pay in taxes, paying them back the $3,600 or $3,000. Single parents making up to $75,000 a year or couples who make up to $150,000 a year will receive the full amount (those earning more will receive less according to their income bracket)—with no minimum income. Child tax credits currently leave many families out, so the new expanded credit will give a break to the millions of families who don't earn enough money to use the credit.
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.
According to the New York Times, 93 percent of children in the U.S. will benefit from the expansion. And the new expanded credit allows families to choose whether to receive a lump sum with their tax returns or monthly payments in installments.
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.
Research on the expanded credit when it was first proposed 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?
Parents can expect to see the first months checks starting in July and running every month until December. Then, they'll receive the remaining amount when they file their taxes in the spring of 2022.
Some Democrats, including Biden, say they want the program to become permanent—even after the pandemic. Other countries that have similar universal child benefit programs include Canada (up to $4,800 per child each year), Ireland ($4,060), the Netherlands ($2,400), and more nations in Europe.
"The president is interested in exploring options for making the child tax credit permanent as part of the 'Build Back Better' agenda," White House press secretary Jen Psaki said in a recent press conference. "He's been heartened to see bipartisan support for ideas like this, including from Republicans like Sen. Romney."
Utah Senator Mitt Romney recently put forward a similar plan: He advocated for $4,200 each year for kids up to age 6 and $3,000 each year for kids 6 to 17. However, his plan means cuts to other social welfare and safety nets.