Starting on the 15th of July, expanded child tax credits averaging $423 per month will begin rolling into the bank accounts of parents of children below the age of 18. These expanded credits are covered under the Biden Administration's $1.9 trillion coronavirus relief package and will continue through the end of the year. 35 million families across the country are expected to receive payments.
Prior to the expansion, the credits totaled $2,000 per child per year, and claims were restricted to parents who had owed income taxes the previous year. Now, the credit is set at $3,600 for children below the age of six, and $3,000 for those between the ages of six and 17; and claims can now be made by parents who did not owe income taxes during the year prior.
Due to the established norm of restricting recipients to those owing income tax, many low income families have reportedly never even heard of the child tax credit. According to the Biden Administration, this new expanded credit should help cut child poverty in half.
"This would be the largest ever one-year decrease in child poverty in the history of the United States of America," Biden said at a speech marking the first round of payments. "Millions of children and their families, starting today, their lives are about to change for the better. And our country would be better off for it as well."
To proponents of the program, it represents a groundbreaking step towards economic growth, income equality, and improved adult outcomes. To critics, it gives parents an excuse not to work, extending their poverty in the long-term. Florida Senator Marco Rubio, Republican, called the expanded credit a "anti-work welfare check."
"Not only does Biden's plan abandon incentives for marriage and requirements for work, but it will also destroy the child-support enforcement system as we know it by sending cash payments to single parents without ensuring child-support orders are established," Rubio wrote in a statement released the day before the payments began.
However, the Biden Administration pushed back against Rubio's claims, reporting Treasury Department estimates showing that 97% of recipients of the credit are likely to either have a job or be self employed with the remaining 3% being made up of grandparents and those with health issues.
Currently, the expansion is set to expire at the end of the year, but the Administration is pushing to have the program lengthened through 2025, if not permanently.
The credit is still restricted to households making below a certain income: payments begin to phase out at the $150,000 income range for married couples, $112,500 for heads of household, and $75,000 for individuals. However, individuals with incomes of up to $200,000 and married couples with up to $400,000 can still claim a reduced credit.
For those who filed taxes in the past year, the child tax credit payments should be deposited into your account on the 15th of each month. If you did not file taxes in the previous year, you can apply for the credit on the Internal Revenue Service (IRS) website.
Some parents are reportedly choosing to opt out of the monthly payments in favor of receiving a refund on their taxes. You can request to opt out of the payments on the IRS site, as well.