I am working hard every day to help families recover from the pandemic and to build our economy back in a way that works for everyone. Our American Rescue Plan, which President Biden signed into law earlier this year, is already making a big difference.
More than 560,000 Rhode Islanders have received a total of over $1.25 billion in direct payments so far because of the new law. That’s a lot of support to help families cover essentials and a huge boost for local businesses. My office has heard from constituents who used the stimulus checks to pay for deferred car repairs, medical bills, and overdue rent.
What is less well known is that the law also included a historic expansion of the Child Tax Credit that is projected to cut child poverty in half, reduce overall poverty by a third, and help an entire generation of kids get off to a stronger start. Parents will begin to receive the first installment of the newly expanded Child Tax Credit as soon as July 15.
The American Rescue Plan increased the Child Tax Credit to $3,600 per child under the age of 6 and $3,000 per child ages 6 through 17. Working families will get the full credit if they make up to $75,000 for a single filer, $150,000 for a couple, or $112,500 for a family with a single parent who files as a head of household. The law also temporarily makes the credit refundable, meaning families will benefit even if they owe no income taxes.
Another new feature: the Child Tax Credit will be sent to families in monthly installments to provide much-needed consistent support. Parents will receive payments up to $300 per month for children up to 5 years old and $250 per month for children ages 6 to 17 starting in the next few weeks. The rest of the credit will be included in tax refunds during the filing season next spring.
The IRS estimates that the families of 90 percent of children in the U.S. will begin receiving monthly payments without any further action required. If you’re unsure whether you qualify, the IRS has created a new tool to help you find out.
I serve as Chairman of the Taxation and IRS Oversight Subcommittee, and my office is available to help ensure Rhode Island families get the tax credits they qualify for. Please feel free to contact my office if you have any questions about the new program.