Can a fourth stimulus check payment take place before December 2021?

After sending the third stimulus check, personal income rose to $ 24.1 billion in March 2021. Since then, the figure has trended downwards, and in September hit $ 20.4 billion. One of the main factors behind the decline was the end of federal unemployment benefits linked to the pandemic programs that fell from a two percent average personal income of April to August at 0.5% in September.

As unemployment benefits ended more than eight million workers in the United States quit their jobs, providing further evidence that the benefits did not prevent people from re-entering the workforce. Always, nearly 30 percent of American adults still had problems paying usual household expenses in early October as the damage to the economy and livelihoods from the covid-19 pandemic continues.

With prices rising across the economy and the holiday season approaching, many are hoping Congress will pass another round of direct payments in December. However, that seems unlikely. A fourth dunning check was not included in the Build Back Better Act or reconciliation bill which has been approved by the House of Representatives on Friday, November 19. Although a stimulus check was not included, the bill, if approved by the Senate, would extend the current structure of the child tax credit another year, bring some relief to families.

Context and extension of the child tax credit

Changes to the value and distribution of the child tax credit have been made under the American rescue plan. These changes increased eligibility for twenty-four million children and in July, the Internatl Revanue Service began distributing monthly payments. For every child families under six receive $ 300 and for those between six and seventeen a payment of $ 250 is made. The last payment in 2021 will be made on December 15, and the remaining value of the credit – half – will be paid off when families file their taxes in the spring.

Studies on upfront payments, which began in July, have reduced hardship for families with children, lift 3 million children out of poverty. The much appreciated The 40 percent reduction in child poverty by 2025 will not be achieved, because that would only be the case if it was extended for the full five years, but it has been reduced. Researchers from the Center on Budget and Policy Priorities also found that “the vast majority of low-income parents spend their child tax credit payments on basic needs such as food, shelter, utility bills and education, which can help give their children a better start in life. “

Rebuild a better extension

Although the extension, included in the Build Back Better Act, is only for one year, and not until 2025 as requested by the White House, the change to make the tax provision fully refundable would become permanent. It will be a boost for low-income families who previously couldn’t start claiming the credit unless they have earned income for $ 2,500 before changes made under the American Rescue Plan. Even then, parents would only gradually receive a larger portion of the credit as their income increased until they could claim the full credit.

By making the fully refundable aspect of the child tax credit permanent, even if another extension cannot be postponed to next year, all taxpayers with eligible children will be able to claim $ 2,000 until 2025, when the credit will increase to $ 1,000 per child under 17.



Source link

Elaine R. Knight