Democrats are proposing to expand the Child Tax Credit to provide as much as $3,600 per child to millions of families as part of President Biden’s $1.9 trillion Covid relief package.
The legislation would provide $3,600 per child younger than 6, and $3,000 per child between the ages of 6 and 17, to be paid out monthly, starting in July. The benefit would phase out for individuals earning more than $75,000 per year and couples earning more than $150,000.
Rep. Richard Neal (D-MA), chairman of the Ways and Means Committee, released the proposal Monday. “The pandemic is driving families deeper and deeper into poverty, and it's devastating. We are making the Child Tax Credit more generous, more accessible, and by paying it out monthly, this money is going to be the difference in a roof over someone's head or food on their table," Neal said in a statement.
Big reduction in poverty: According to researchers at Columbia University, the legislation would cut child poverty in the U.S. by as much as 54%, with more than 5 million children being lifted out of poverty, The Washington Post’s Jeff Stein reported.
Following stimulus payment model: The payments would be sent by the IRS and directly deposited into recipients’ bank accounts, similar to the way stimulus payments have been handled. Qualifying parents would receive $250 or $300 per month per child, depending on age. The payments would be made regardless of existing tax obligations.
The plan would also reportedly include a “safe harbor” provision that would allow those sent benefits in error to avoid being force to pay them back.
Currently, the Child Tax Credit provides up to $2,000 per child under the age of 17, and is not paid in monthly installments.