ROCHESTER, N.Y. (WROC) — If you’re a part of a family with children – there’s a good chance you receive a child tax credit. President Biden’s $1.2 trillion stimulus relief package signed into law Thursday night is going to raise this credit for a year, and make it easier for you to qualify.
Families in the area could be seeing relief as soon as July.
Larry Marx, CEO with Rochester Children’s Agenda says the increase is going to be revolutionary.
“Within a single year, there could be more children lifted out of poverty than any other time … In the past the way it works, there were 24 million families with children who were too poor to qualify for the child tax credit, that’s been changed,” he said.
The change: it’s fully refundable – meaning if you don’t make enough income to owe any taxes – you can still get a credit of up to $3,600 dollars depending on the child’s age.
- The increase will be phased out for families making over $150,000, and those making over $170,000 will see no added benefit
- Single filers making under $200,000 and married filers making less than $400,000 would still be eligible for standard $2,000 payments.
- The Department of Treasury has not yet determined how payments will be dispersed (monthly, yearly).
Marx says this is going to help Rochester specifically – as the city has one of the lowest child poverty rates in the country.
Additionally, Black and Hispanic families will benefit to a greater degree – national statistics show 1 out of 5 Black children would get zero tax credit, and half of Black and Hispanic families with children didn’t qualify.
Lawmakers are hoping to make it permanent, going into 2022.
But the meantime, Marx says this will be a boost families desperately need – and also one the economy can benefit from.
“Because of the fact that poor people will be spending more money to keep their heads above water,” he said.
Why could it be revolutionary?
“We have seen through social security, which provides monthly security to senior citizens over age 65, that in 1935 when that law was initially passed, we had a poverty rate of 30% or higher, almost 1 out of every 3 seniors in the U.S. were poor and now it’s down to like 1 out of 6 or 7 seniors. With children, it’s now 1 out of 7 children in the U.S. are poor,” said Marx. “It’s high time that we pass a law like this which will lift about half of our children out of poverty.”
In the past the tax credit only applied to children ages 16 and younger, but the new plan includes $3,000 dollar benefits for families with a 17 year-old, as long as they qualify.