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The improved child tax credit is one of the programs that has been cut as Democrats rushed to agree on a framework for their spending plan.
The credit, which was extended in March by the US bailout, will continue until 2022, according to an executive of the now $ 1.75 trillion proposal released Thursday. This decision will ensure that some 39 million families with children will receive the allowance for at least one more year.
In addition, full repayment – a recent change in credit that allows children from poorer families to get the money – will be made permanent.
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This year, the existing child tax credit was expanded to include more children than ever before. The benefit was increased from $ 2,000 to $ 3,000 for children aged 6 to 17, with an additional premium of $ 600 for children under 6.
Most American families receive child tax credit money. The full enhanced benefit goes to married couples with adjusted gross income of up to $ 150,000 and to single-parent families up to $ 112,500.
The first half of the credit began to flow to eligible families in advance of the monthly payments that began in July. Families will get the second half of the credit when they file 2021 taxes next year. As of October, the IRS and the US Treasury Department have sent $ 60 billion in funds to more than 36 million households.
A poverty reduction program
Early data showed that families put the money to good use. About a third of families used the first three checks to buy school supplies, and 40% of those with young children spent the money on child care, according to the latest Household Pulse Survey from the US Census Bureau.
Other studies have shown that checks are a powerful anti-poverty measure. The first two checks lifted 3.5 million children out of poverty, according to a study by the Center on Poverty and Social Policy at Columbia University. If extended until 2025, it could reduce the child poverty rate to 8.4% from 14.2%, according to the Urban Institute.
Money also reduced child hunger rates and eased financial anxiety for families.
Making the credit fully refundable meant an additional 27 million children, many of them black and Latino, were able to access the benefit for the first time, according to the Center on Budget and Policy Priorities.