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Encourage Money and Tax Breaks for Kids: What Parents and Guardians Need to Know



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Under the current incentive proposal, families with children and older adults may qualify for new tax breaks that could generate thousands of additional dollars.

Sarah Tew / CNET

While you already know President Joe Biden’s $ 1.9 trillion incentive plan contains one third stimulus check of maximum $ 1,400 per eligible person, did you know there are other ways your family could get more money out of the proposed account? Congress is currently working to approve the US bailout plan (PDF). This is what’s included: a major extension to the tax credit for children, increased access to affordable childcare for young children, money for services for the elderly and disabled, and an increase in the maximum tax credit for adults, including older workers.

However, until a bill is signed by Biden to become effective, these provisions are not guaranteed and may change at any time. Biden is also expected to include more child and elderly care facilities in a future bill, according to The Washington Post.

Here’s everything we now know about what the plan currently includes in terms of benefits for children and adults older adults, and how your family could see thousands of dollars in tax breaks this year. (We broke out any other way your family could get more incentive money this time too

Apart from a third incentive check, how much money can my family receive for my children?

The US bailout includes several provisions aimed at reducing child poverty in the US, which could give some families an extra infusion of cash this year. Among which:

Stimulus checks for dependents. Under the current invoice, dependents of any age (including children, Adolescents or older adult relatives) qualify for up to $ 1400 each in incentive payments. This money do not come in the form of their “own” checkhowever, it is added to the household’s total instead.

Extension of the tax credit for children. Parents can usually claim a CTC of up to $ 2,000 on their taxes for any child under the age of 17. The American Rescue Plan states that families with children 17 and under would receive a $ 3,000 credit, while families with children under the age of 6 would receive a $ 3,600 credit. It also makes the credit fully repayable, removing both the dollar limit and the income limit that currently prevent many low-income families and children from receiving the full credit, according to the Center for Budget and Policy Priorities.Read more information about the changes to the child tax credit here

Extended tax credits for childcare. To make childcare more affordable for families, the plan provides a childcare tax credit for children under the age of 13 – totaling up to $ 4,000 for one child, or $ 8,000 for two or more children. The credit would be repayable and available to families earning less than $ 125,000 per year. Those making between $ 125,000 and $ 400,000 would get a partial credit (find out what your adjusted gross income is hereThe plan also calls on Congress to provide funding to keep childcare centers open and improve wages and benefits for childcare workers.


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

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

Stimulus checks for older adults, including dependents. Under the current bill, the elderly (including recipients of SSI or SSDI benefits) would qualify for one third stimulus check from up to $ 1,400, when they meet admission requirementsThis includes older adults who are listed as dependents on someone else’s taxes, although their share of the incentive money would be added to the total amount of the household. (Find out all the rules around stimulus controls for older adults

Expansion of the earned tax credit. This tax credit is designed for people with lower income and can lower your taxable income and wages. Biden’s plan proposes to increase this credit for childless adults from about $ 530 to $ 1,500, and raise the income limit for the credit from $ 16,000 to $ 21,000. It would also expand the eligible age range and remove the age limit for older workers. And if your earnings fall in 2021 due to the pandemic, you wouldn’t see your credit cut. (Read more about how to claim the earned income tax credit this year

More funding for services for the elderly and disabled. The American Rescue Plan includes additional funds for elderly and disabled services, but does not elaborate on exactly where that money would go.

Look for more information how a third check can make more money for your family, and when the IRS could send the third stimulus check


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