President Joe Biden wants to send you $300 checks every month if you have children.
Here’s what you need to know.
Stimulus Checks
The $1.9 trillion stimulus package includes more than a third stimulus check and unemployment insurance. Among other benefits is up to a $3,600 cash allowance for children under age 6, which equates to a $300 check every month. There’s also up to a $3,000 cash allowance for children ages 6 to 17, which equates to a $250 check every month. (This would change the prior child tax credit of up to $2,000 annually). However, this child allowance is only temporary under the new stimulus package.
Biden wants to change that.
Child Tax Credit: Who Qualifies
Like the stimulus check, not everyone qualifies for the child allowance. To qualify for direct payments every month, which would begin this July, you must have adjusted gross income below:
- Individuals: $75,000
- Married / Joint Filers: $150,000
If you have income above these income thresholds, the child tax credit begins to phases out. If you have higher income, you can still get the $2,000 child tax credit. To qualify, individuals must have income less than $200,000 and married / joint filers less than $400,000.
Why monthly checks should be permanent
Biden wants to make the new child allowance permanent for several reasons:
- Immediate Cash Flow: Monthly checks, rather than an annual tax credit, provide more immediate cash flow.
- Guaranteed Income: Provides guaranteed income particularly for low and middle income Americans with financial need.
- Fight Poverty: According to the Urban Institute, monthly checks could help lift more than 5 million children out of poverty.
- Health: Monthly checks can help parents get greater access to health care.
- Education: Monthly checks can help children get access to better education.
- Social Mobility: Parents will have more resources to move, which could improve social mobility.
- Financial Optionality: Parents will have more financial flexibility to spend on essentials ranging from rent to groceries to child care.
- Emergency Fund: Parents could use monthly checks to build an emergency fund.
How child tax credit become permanent
Congress can make the child tax credit permanent, which could send up to $300 every month to qualifying parents. The idea of monthly, guaranteed income is similar to proposals in Congress to pass $2,000 stimulus checks every month until the Covid-19 pandemic is over. Former presidential candidate Andrew Yang, who is now a leading candidate to become mayor of New York City, proposed universal basic income as a centerpiece of his presidential campaign. Under Yang’s proposal, every U.S. citizen over age 18 would get $1,000 every month for life. Like the new child allowance, Yang’s Freedom Dividend is intended to help lift people out of poverty and prevent others from falling further into poverty.
