WASHINGTON, DC – The new $ 1.9 trillion stimulus bill cleared its final hurdle and passed the House early Wednesday afternoon.
New tax credits are added for families that increase the current child tax credit from $ 2,000 to $ 3,000 for each child between the ages of 6 and 17. For children under 6 years old, it is $ 3,600 per child. It is expected that child poverty will almost be halved in one year.
“The expansion will not affect 2020. There is still a $ 2,000 credit available to people for 2020. But what we’re talking about now is for 2021,” said Bill Bloss of RLB Accountants in Allentown.
Thanks to the stimulus package, half of the new credit can be paid out monthly as an advance on your 2021 taxes from July to December. The remainder of the credit can be claimed when you sign up before 2021.
“They can file their tax returns – in this case April of ’22, and get the remaining balance they still owe,” Bloss said.
You also no longer need to be employed to claim the credit.
The money is gradually starting to diminish for individuals earning more than $ 75,000 and married couples $ 150,000, although some Democrats in Congress call that unfair to single parents since childcare costs are the same regardless of marital status.
For now, the tax credit will only apply to 2021, but President Biden and others are already talking about making this provision – and others – permanent.
“We have to be careful, we have to be careful, we have to support those who need the help, but don’t overdo it,” said former Republican Congressman Charlie Dent. provision laid down in this bill – which we were told was necessary in an emergency – and now we are going to make it permanent. I think that’s a bit unfair. “
Republican Senator Mitt Romney has his own proposal to do something similar with the child discount. That proposal would actually yield more.
“Some of these provisions may deserve an extension, but that should be a separate debate on a separate day,” Dent said.
President Biden is expected to sign the bill on Friday.