CHICAGO (NewsNation Now) — Among the many proposals in President Joe Biden’s $1.8 trillion “American Families Plan” is continuing an expansion of the Child Tax Credit which will begin sending families checks of up to $300 a month in July.
While the Child Tax Credit is not new, the $1.9 trillion American Rescue Plan passed in early March expanded eligibility, increased amounts, and allowed families to receive the credit in installments.
Under the plan, the maximum age for a child to be eligible was raised a year to 17. Credits owed could be paid in monthly checks instead of a lump sum at tax time.
It also became fully refundable, so families could receive the full amount even if they paid $0 in taxes, effectively turning the tax credit into a cash benefit.
While the updated Child Tax Credit will be included when families pay their 2021 taxes, they can opt to receive the credit ahead of time in monthly installments starting on July 1. In receiving the credit ahead of time, families who owe taxes would not be able to deduct the credit from the amount they need to pay.
Speaking during a rally Thursday, Biden reiterated claims from Democrats and academics that extending the credit would cut child poverty in the U.S. by more than half.
Under the “American Families Plan,” the Child Tax Credit would be fully refundable indefinitely, while the expansions would be continued through 2025, including:
- For children age five and younger: A maximum credit of $3,600 each (an increase of $1,600)
- For children age 6-17: A maximum credit of $3,000 each (an increase of $1,000)
Payments are phased out based on Adjusted Grosse Income, which is the starting point when you pay taxes. The maximum value of the tax credit is reduced by $50 for every $1,000 above the limit for:
- Single filers: Phase-out begins at an AGI of above $75,000
- Head of household: Phase-out begins at an AGI of $112,500
- Couples filing jointly: Phase-out begins at an AGI of above $150,000
Child Tax Credit Payment Calculator
Use this calculator made by NewsNation affiliate WCMH to estimate how much you might receive in child tax credit periodic payments beginning in July 2021.