The child tax credit is a benefit that provides financial assistance to eligible families with children. It has been around for years, but the American Rescue Plan Act of 2021 made some significant changes to it.
Previously, the maximum amount of the child tax credit was $2,000 per child under 17 years old. Families who owed less in taxes than their credit could cover were not able to receive the full amount. However, under the new plan, the credit has increased to $3,000 for each qualifying child aged 6-17 and $3,600 for each child under age 6.
The eligibility requirements have also been expanded. Previously, only families with a certain income level could claim the full credit. Now, families earning up to $150,000 (married couples filing jointly) or $75,000 (single filers) can receive the full amount of the credit per child.
Another significant change is that half of this year’s total tax credit will be paid out in monthly installments starting July 15th and ending December 15th. So rather than waiting until next year’s tax return season to get all your benefits at once as before – parents will begin receiving advance payments from Uncle Sam on a monthly basis through direct deposit or check mailed directly home!
This change aims to help low-income households who may not have enough money saved up for back-to-school expenses or other necessary purchases typically made during summer months when kids are out of school.
There are no restrictions on how parents can use these funds; they can put them towards any expense related to raising their children such as rent/mortgage payments; food costs; clothing/shoes; medical bills & insurance premiums; childcare expenses etc., making this benefit an excellent way to alleviate some financial stressors experienced by American families over recent times due To COVID-19 pandemic impacts on employment and livelihoods.
In conclusion: The changes brought about by the American Rescue Plan significantly increase the child tax credit benefit, making it a valuable resource for families with children. The monthly installments will provide some financial relief to low-income households and allow parents to better plan for expenses related to raising their children.