The stagnation and lack of change in the childhood poverty rate calls for policy makers to do something dramatic and innovative about it. We are excited that the American Rescue Plan included enhancement to the Child Tax Credit to specifically to address childhood poverty with the goal in mind that the increase in cash assistance to families may be able to cut childhood poverty in half.
The enhancements to Child Tax Credit include:
Increasing the credit amount to $3,600 for kids under 6 and $3,000 for kids over 6;
Making the credit refundable and paid directly to families;
Offering the credit as an advance payment to families July-December, or a monthly allowance, that will be deposited directly into families’ linked bank accounts;
For more info and to access the online tools to update status or file to receive the credit if your family did not have a tax liability, visit ChildTaxCredit.gov.
Access and download the PDFs below for more information (courtesy of the White House and Annie E. Casey Foundation) by clicking on the thumbnails.
How policymakers can act to help families experiencing financial hardship and maximize the Child Tax Credit.
During the August Special Session, state lawmakers can dedicate American Rescue Plan resources to improve tax filing outreach and preparation services to ensure non-filers and families with infants receive the credit.
Virginia lawmakers can also provide state level enhancements to the federal tax credits including a refundable Earned Income Tax Credit (EITC) and a state-level child tax credit.
Congress can act to make the Child Tax Credit permanent adopting the proposal included in President Biden’s American Families Plan.
The American Rescue Plan Act that passed in March 2021 is the third federal relief package and totals $1.9 trillion. It includes a wide range of benefits to create a path to recovery from the economic and health impacts of the COVID-19 pandemic. The act is the most recent federal relief package and is one part of President Biden’s Build Back Better plan, which includes the American Families Plan and American Jobs Plan. It comes one year after the initial relief package of $2.2 trillion allocated through the CARES Act. The new plan extends some provisions from the previous relief packages, provides direct aid to states and localities and creates changes to tax policy.
Below is a preview of the benefits available to support families now as well as those coming up that individuals should be aware of:
Emergency Broadband Benefit: The EBB is available for low-income families to receive monthly discounts on their broadband service through participating providers.
P-EBT: The Pandemic EBT program provides assistance to children who qualify for free or reduced lunch who are attending school in a remote or hybrid model.
SNAP: SNAP benefits have been increased by 15% through September 20, 2021.
WIC: WIC Cash Value Benefit has been increased to $35 per month temporarily.
Free school meals: All students are eligible for free school meals at participating locations.
Increased prenatal care for undocumented mothers: Undocumented women are now eligible for comprehensive prenatal care and coverage for 60 days postpartum.
Starting April 1, 2021, Green Card holders who have lived in the United States for at least five years no longer have to provide proof of work history to be eligible for Medicaid.
People who were formerly in foster care between ages 18-26 could be eligible for direct cash assistance as well as housing and educational assistance through the Virginia Department of Social Services.
Youth who have experienced homelessness or foster care are also temporarily eligible for the Earned Income Tax Credit and can begin claiming it at age 18, even if they are full-time students.
Rental Assistance: Rental assistance is available through the Department of Housing and Community Development.
Tax Credits/Economic Supports
Stimulus checks: There have been three direct economic impact payments, also referred to as stimulus checks. The most recent round provided direct payments of $1,400 and eligible people who have not received their checks may be able to claim them when filing their 2020 taxes.
Expanded EITC: The Earned Income Tax Credit was expanded to include childless workers age 19 and older.
Improved Child Tax Credit: The Child Tax Credit has been increased and made fully refundable. Additionally, families can expect monthly allowances starting in mid-July till the end of the year for half of their expected credit. They will receive the remainder when they file their 2021 tax return.
Improved Child Care and Development Credit: The Child Care and Development credit has also been increased, made fully refundable and can cover up to half of child care expenses for children under 13.
Stay tuned for more information on these benefits, including how to apply and resources to help people file their taxes!
President Biden’s first 100 days in office have been busy! The federal response packages keep coming and it is a challenge to keep track (for us too!). Below are some resources explaining what is included in each plan, what you can expect as a next step, and how you can keep up with proposed legislation. Because of many sweeping federal changes included here, Voices’ team will do more topic-specific presentations and blogs to break down these changes.
CARES and Consolidated Appropriations Act/CRSSA: Approved
As a review, two significant funding packages were approved in 2020. The $2.2 trillion CARES Act approved in March 2020 and the $2.3 trillion Consolidated Appropriations Act approved in December 2020 with both COVID-19 relief and on-going federal funding. These funds are approved and allocated to the respective agencies for use. In most cases, the state or local agency receiving the funds has already determined how they will use the funds but the actual resources could be spent over a longer period of time; through 2022 or 2023.
Congress approved $1.9 trillion in March 2021 through the American Rescue Plan to build on the existing COVID relief funds with a particular emphasis on an equitable recovery for economically disadvantaged families. The American Rescue Plan includes three types of funding: 1) flexible funding to states and local governments, 2) tax credits/direct payments to individuals and 3) resources to state agencies to increase specific federal programs.
Virginia Impact: Since the American Rescue Plan was approved after the General Assembly Session ended most of the plans and allocations have not yet been determined by state agencies. In some cases, federal guidance is not yet available on the use of the funds. The General Assembly has indicated they will return for a Special Session in June to weigh in on the uses of the American Rescue Plan funds.
Family Impact: Because this plan includes changes to tax policy and government programs, families should be aware that resources will be made available by filing taxes AND seeking assistance through support networks such as CommonHelp, CoverVA or local human services agencies.
On March 31, 2021 President Biden released the $2.3 trillion American Jobs Plan focused on the physical infrastructure and human infrastructure for economic growth. The plan includes funding for physical improvements of housing, schools and child care and workforce development programs. This plan will need to be introduced as legislation for Congress to act.
On April 28, 2021 President Biden released the American Families Plan, a comprehensive proposal targeted to economically disadvantaged families and youth offering direct assistance, free higher education, universal preschool, expanded child care access and expanded paid family medical leave. This plan will need to be introduced as legislation for Congress to act. The legislation includes proposals to raise individual and corporate taxes to pay for these investments.
At the state level, advocates will be asked to contact state delegates and senators to support proposed uses of the funds provided in the American Rescue Plan at a Special General Assembly Session in June 2021.
At the federal level, advocates will be asked to contact Congressional representatives and their senators to support legislation that will be introduced with the proposals included in the American Jobs Plan and American Families Plan. Congress has expressed an urgency to act on this legislation, likely over the summer of 2021.