The Kovid-19 relief law, signed on Thursday by President Biden, includes a large increase in direct aid to families, more than any other epidemic relief bill passed so far – on average $ for homes with children 6,660, according to a Analysis by Nonpartisan Tax Policy Center.
For 500,000 poor families with two or more children, aid of about $ 10,000 would be twice their annual income. by some an estimateThe bill could cut child poverty in half this year.
The bill primarily accomplishes this in two ways: a significant increase in incentive payments per child, and a larger child tax credit that would particularly benefit the lowest-income families.
Incoming incentive checks are larger than the first two rounds for adults – $ 1,400 per adult, while the bill passed in March 2020 includes $ 1200 per adult and $ 600 per adult in December. The same income limit applies to receiving the full amount: $ 75,000 for singles, $ 112,500 for heads of households, and $ 150,000 for married couples, although the check amount goes out much faster for those earning above those levels is.
The biggest increase is for children and other dependents. In the first two rounds, taxpayers received $ 500 for each dependent child and then $ 600. This round includes $ 1,400 for each dependent child and adult dependent, including college students.
And unlike previous rounds of incentives, the child tax credit has been increased. It is now $ 5600 per child under 5 years old and $ 3,000 per older child, worth $ 2,000 per child. Low-income families will benefit the most, as they will now be eligible for the full amount, even if their tax liability is very low.
Previously, parents could deduct a $ 2,000 per-child credit from their tax liability. If they do not pay that much in taxes, they may be eligible to receive up to $ 1,400 in returnable credit. Now all the parents will get half of the value of the credit starting in July.
Income limits for full child tax credits are the same as for incentive payments. The credit for unmarried taxpayers earning $ 240,000 or more is completely excluded, and for married couples earning $ 440,000.