As families receive the latest round of checks, lawmakers are debating the future of the enhanced Child Tax Credit. The third of six payments, each worth up to $900 per child, is set to hit parents' bank accounts today, September 15.
Parents of about 60 million children will receive the payments via direct deposit Wednesday, while other qualifying families will get their checks via mail a few days to a week later.
There are three more CTC advance payments remaining under the American Rescue Plan that President Joe Biden signed into law in March. Those will arrive on October 15, November 15, and December 15. In total, the six payments amount to half of the full value of the tax credit. The second half of the credit will be applied when families file their 2021 taxes next spring.
Although the American Rescue Plan expanded the CTC just for 2021, Biden's American Families Plan proposes keeping the enhanced CTC through 2025. The House Ways and Means Committee is set to debate that expansion this week as it examines Democrats' proposed $3.5 trillion spending package.
Some lawmakers have proposed changes. Senator Joe Manchin, D-WV, who voted in favor of the tax credit's expansion in the American Rescue Plan, is now criticizing the enhanced CTC for not being targeted enough.
Video by Helen Zhao
"There's no work requirements whatsoever," Manchin said during a September 12 appearance on CNN's "State of the Union." "There's no education requirements whatsoever for better skill sets. Don't you think if you want to help the children, the people should make some effort?"
Senator Bernie Sanders, I-VT, and Senator Sherrod Brown, D-OH, among other lawmakers, have publicly disagreed with Manchin's proposed modifications. "I think that raising children is work," Brown told reporters Tuesday.
Keeping the enhanced CTC could cut the rate of child poverty even further, reducing it to about 8.4% from 14.2%, a decline of roughly 40%, according to a recent study by Gregory Acs and Kevin Werner at the Urban Institute, a Washington think tank.
"Keeping the expanded Child Tax Credit will provide much-needed support to the lowest income families with children," says Elaine Maag, a principal research associate at the Urban-Brookings Tax Policy Center. "It has already been associated with reduced food insecurity and many people reporting they're able to pay off bills."
Those effects would be felt nationwide, Maag says: "Research shows that not only has the expanded Child Tax Credit been a powerful tool for families during the pandemic, but in a typical year, it would reduce the poverty rate in nearly all states below 10%."
The overall poverty rate in the U.S. rose slightly in 2020, up to 11.4%, according to data released by the U.S. Census Bureau on September 14. But in a sign that government aid is helping, when accounting for pandemic relief, the poverty rate fell to 9.1%, the bureau found.
The maximum Child Tax Credit for 2021 amounts to $3,600 per child under the age of 6, and $3,000 per child ages 6 to 17. You can qualify for the full credit if you're a single filer with a modified adjusted gross income of less than $75,000, a single parent filing as head of household with a MAGI of less than $112,500, or a married couple filing jointly with less than $150,000 in income. The credit phases out for taxpayers with higher incomes.
Use Grow's calculator below to find out how much your family could get.
Families who don't want to receive the advance payments can opt out using the IRS' Child Tax Credit Update Portal. Updates made by October 4 would affect the fourth payment, which is set to be paid out on October 15.
You can also use the portal to make other changes to your account, like to your mailing address or online banking information.
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