Stimulus money and tax breaks: How parents and older adults could get extra cashMarch 2, 2021
The American Rescue Plan Act of 2021 — which could be passed into law — also seeks to (which might be amended), support affordable early child care, provide money for aging and disability services, and raise the maximum earned income tax credit for adults, including older workers.is on track to be picked up . The of per person may be its marquee feature, but that’s not the only money your family may be . The
While these terms are in the current version of the bill, it’s possible lawmakers could change them before it is finalized. President Joe Biden is also expected to expand child and elder care in a future bill, according to The Washington Post.
Below, we’ve got everything we know now about what the plan includes to benefit parents, children and, and how your family could see thousands of dollars in tax benefits this year. (We’ve broken out all the ways your family time time around, too, and here’s .)
I have children. How much extra money could my family receive, besides the third stimulus check?
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,(including children, or ) will be in stimulus payments. This money , however, but will instead be added on to the household’s total. here.
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 current proposal in 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. ( .) However, details like periodic rather than monthly payouts, are still up in the air.
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). The plan also calls on Congress to provide funding to keep child-care centers open, and improve wages and benefits for child-care workers.
I’m an older adult. What kinds of payments or tax breaks does the bill include for me?
The American Rescue Plan includes funding for programs aimed at helping older adults financially as well. These include:
Stimulus checks for, including dependents. Under the current bill, older adults (including recipients of benefits) would be eligible for a of , if they meet . This includes older adults who are on someone else’s taxes, though their share of stimulus money would be added to the household’s total amount. (Find out .)
Expansion of the Earned Income Tax Credit. Designed to benefit people with lower incomes, this tax credit can reduce your taxable income and wages. The relief 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.)
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, and .