Biden pushes for monthly child tax credit payments

WHAT YOU NEED TO KNOW:

• The White House said on Monday that child tax credit payments can now be received on a monthly basis starting July 15.
• The monthly payments will help qualified US families to better plan for their household budget.
• President Joe Biden has pushed for the extension of the child tax credit increases until 2025.

For the first time, around 39 million families in the US will be receiving monthly child tax credit payments beginning July 15, the White House announced Monday.

Administration officials said that the payments, included in the American Rescue Plan’s expanded child tax credit program, are poised to significantly minimize child poverty.

Typically given as yearly tax refunds, the payments will be disbursed on a monthly basis for the first time. Since the payments will be given in advance as 2021 goes halfway in June, the half of tax refunds will be provided to families.

About eight of 10 families have already set up a direct deposit where the money would be automatically wired while the remaining qualified families could obtain the payments through check or debit card.

Families will receive monthly payments of up to $300 for every child aged five and below, and around $250 for every kid aged six to 17. Once the child becomes 18, the credit will no longer be applied.

Eligible families will receive the payments every 15th of the month except if the date would fall on a weekend or a holiday.

The enlarged payments would not be given to family households with the following annual salaries: (a) more than 150,000 for married couples with joint tax returns, together with qualified widows or widowers, (b) over $112,500 for heads of households; and (c) more than $75,000 for other individual taxpayers.

During a call with the media Sunday night, White House officials noted that transitioning to monthly payments would enable families to better organize their household budgets. They also said that they will launch an outreach program to raise public awareness and assist the people in receiving the monthly benefits.

President Joe Biden has expressed support in prolonging the child tax credit increase in the American Rescue Plan until 2025, with an option of having a full refund.

“While the American Rescue Plan provides for this vital tax relief to hard working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come,” Biden said in a statement, adding that “for working families with children, this tax cut sends a clear message: help is here.”

For the 2021 tax year, Biden’s $1.9 trillion COVID-19 package had reinforced the child tax credit program, as the maximum payments that families could gain would be up to $3,600, from the usual $2,000.

Source: AOL.com