President Biden says that a child tax cut will be included in the American Rescue Plan for American families.
On Monday morning, May 17, Biden announced that the American Rescue Plan will be delivering a child tax cut for 88% of families in the US.
Biden makes clear that “while the American Rescue Plan provides for this vital tax relief to hard-working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come.”
According to the U.S. Department of the Treasury and the IRS, about 39 million American families—which covers about 88% of families— will receive their first monthly Child Tax Credit by July 15, 2021.
All eligible middle-class and working-class families will receive a payment of $300 per month for children under the age of 6, and up to $250 a month for each child above the age of 6.
Treasury and IRS said that the increased CTC payments will be made on the 15th of each month, unless the 15th falls on a weekend or holiday, allowing families who receive the credit by direct deposit to plan their budgets around receipt of the benefit. Families will receive monthly payments through direct deposit, paper checks, or debit cards.
In 2021, the American Rescue Plan increased the Child Tax Credit to $3,600 for children under the age of 6, and $3,000 for children above the age of 6. Due to this increase, the American Rescue Plan expects to take over 5 million families out of poverty and cut child poverty in half this year.