Inside the COVID relief package that could be voted on by the full House as early as next week, there are two different dollar amounts which involve children and their parents that people are talking about. One is related to the third stimulus check. The other is an expansion of the child tax credit.
A person could be forgiven for confusing the two. Here’s what they are, how much they are and how they would potentially be paid out if the bill passes Congress.
How much is the third stimulus check?
The latest iteration of the third stimulus check, which passed through the House Ways and Means Committee last week, calls for most Americans to receive a one-time $1,400 direct payment.
For taxpayers who file individually, they would get the full $1,400 if they made $75,000 or less, and would receive a portion of that if they made between $75,000 and $100,000. Couples who made up to $150,000 would get $2,800 — a number that would be phased out if their income was between $150,000 and $200,000.
But on top of that, taxpayers would get an additional $1,400 for each dependent. So, a couple with two children could get up to $5,600 total.
If you welcomed a child into your family in 2020, you may want to file your taxes before the COVID relief bill gets passed to be assured you take advantage of the benefit.
Unlike the one-time stimulus payment, the child tax credit is something parents deal with every April 15. It’s $2,000 per year, per child and most Americans get this money when they do their taxes.
The COVID relief bill calls for this to not only be increased, but to have the payments divided into monthly installments. The aim is to battle childhood poverty in America by giving struggling families the money as they go, not in one annual lump sum.
The proposal would pay parents $300 per month for each child under six years old. That would be $3,600 per year. For children ages 6-17, the total would drop to $250 per month or $3,000 per year. Families would get the full credit regardless of how little they make in a year.