Some households will be getting a lot more stimulus money before the end of the year. The American Rescue Plan distributed $1,400 direct payments to the majority of Americans after Congress approved two other payments.
Unemployment benefits have been expended most recently by $300. It also put money in people's pockets through a number of tax credit reforms.
The expansion of the federal child tax credit was one of the changes in the American Rescue Plan. Until the end of the year, the government will pay the first half of this credit in advance. The first two installments have already been made.
Here's how we arrive at the $1,000 figure.
There are four more payments left in the expanded child tax credit - Sept. 15, Oct. 15, Nov. 15, and Dec. 15. If a household has a child aged 17 or younger, they will get a minimum of $250.
So, $250 multiplied by four payments is $1,000.
And that's just the bare minimum if your family is eligible. This tax credit is available for each child. Also, if you have younger children, the amount of money increases.
If you earn a certain amount of money, the payments will begin to phase out. The IRS says if your adjusted AGI exceeds in 2021, the Child Tax Credit is decreased to $2,000 per child.
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$150,000 if married and filing jointly, or $150,000 if filing as a qualifying widow or widower.
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$112,500 if you file as the head of your household; or
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If you are a single filer or married filing a separate return, you can deduct up to $75,000 from your taxable income.
The first phaseout reduces the Child Tax Credit by $50 for every $1,000 (or part thereof) that your updated AGI exceeds the applicable income threshold specified above.
Moreover, this is only the first part of the tax credit. When you submit your taxes in 2022, you will receive the second half as a lump sum.
These payments, by the way, are not taxable, according to the IRS.
So far, the federal response to the economic crisis caused by the coronavirus pandemic has paid out $3,200 to eligible adults: $1,200 under the Coronavirus Aid Relief and Economic Security Act, signed into law in March 2020; $600 in a December relief measure; and $1,400 under President Joe Biden's American Rescue Plan, signed into law in March.
