As reported by cnet,

Under the current stimulus proposal, families with children and older adults may be eligible for new tax breaks that could bring in thousands more dollars.


Sarah Tew/CNET

While you already know President Joe Biden’s $1.9 trillion stimulus plan includes a third stimulus check of up to $1,400 per eligible person, did you know there are other ways your family could get more money from the proposed bill? Congress is currently working to get the American Rescue Plan (PDF) approved. Here’s what’s included: a major expansion to the Child Tax Credit, more access to affordable early child care, money for aging and disability services, and a raise to the maximum earned income tax credit for adults, including older workers. 

Until a bill is signed by Biden to become law, however, none of these provisions are guaranteed and could change at any time. Biden is also expected to include more provisions for child and elder care in a future bill, according to The Washington Post. 

Here’s everything we know now about what the plan currently includes in terms of benefits for children and older adults, and how your family could see thousands of dollars in tax benefits this year. (We’ve broken out all the other ways your family could get more stimulus money this time around, too.)

Beyond a third stimulus check, how much more money could my family receive for my children? 

The American Rescue Plan includes several provisions aimed at lowering child poverty rates in the US, which could bring some families an extra infusion of cash this year. These include:

Stimulus checks for dependents. Under the current bill, dependents of any age (including children, young adults or older adult relatives) will be eligible for up to $1,400 each in stimulus payments. This money won’t come in the form of their “own” check, however, but will instead be added on to the household’s total. 

Expansion of the Child Tax Credit. Parents can usually claim a CTC of up to $2,000 on their taxes for every child under age 17. The American Rescue Plan states that families with children aged 17 and under would receive a credit of $3,000, while those with children under the age of 6 would receive a $3,600 credit. It also makes the credit fully refundable, removing both the dollar cap and earnings limit that currently prevents many low-income families with children from receiving the full credit, according to the Center on Budget and Policy Priorities. (Read more details about the Child Tax Credit changes here.)

Expanded tax credits for child care. To make child care more affordable for families, the plan provides a child-care tax credit for kids under age 13 — a total of up to $4,000 for one child, or $8,000 for two or more children. The credit would be refundable, and available to families making less than $125,000 per year. Those making between $125,000 and $400,000 would receive a partial credit (find out what your adjusted gross income is here). The plan also calls on Congress to provide funding to keep child-care centers open, and improve wages and benefits for child-care workers.


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What types of money or tax breaks does Biden’s plan include for older adults? 

The American Rescue Plan includes funding for programs aimed at helping older adults financially as well. These include: 

Stimulus checks for older adults, including dependents. Under the current bill, older adults (including recipients of SSI or SSDI benefits) would be eligible for a third stimulus check of up to $1,400, if they meet eligibility requirements. This includes older adults who are listed as dependents on someone else’s taxes, though their share of stimulus money would be added to the household’s total amount. (Find out all of the rules around stimulus checks for older adults.)

Expansion of the Earned Income Tax Credit. Designed to benefit people with lower incomes, this tax credit can reduce your taxable income and wages. Biden’s plan proposes raising this credit for childless adults from about $530 to $1,500, and raising the income limit for the credit from $16,000 to $21,000. It would also expand the eligible age range, eliminating the age cap for older workers. And if your earnings fall in 2021 due to the pandemic, you wouldn’t see your credit reduced. (Find out more about how to claim the Earned Income Tax Credit this year.) 

More funding for aging and disability services. The American Rescue Plan includes additional funds for aging and disability services programs, but doesn’t go into depth about where exactly that money would go. 

For more, find out how a third check could bring your family more money, and when the IRS could send the third stimulus check out



Source link: cnet

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