Over the weekend, the Senate approved President Joe Biden’s $1.9 trillion COVID relief bill, which includes tax credits for children.
Under the provisions of the American Rescue Plan Act, the tax credit increases from $2,000 to $3,000 for children between the ages of 6 to 17 and to $3,600 annually for children under 6.
While final details of the bill are still being worked out, Americans with children under 18 could start seeing payments this summer, reported CNBC.
Beginning in July, the IRS could start dispersing monthly payments of $250 for school-age kids, and $300 monthly payments for younger children.
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Parents could receive half of their annual credits this year and claim the other half on their 2021 taxes.
The full tax credits are available to individuals, with qualifying children, earning up to $75,000 annually, or $150,000 for married couples filing jointly.
For every extra $1,000 in adjusted gross income, $50 per year is reduced per child. The tax credits would be phased out completely for individuals earning $95,000 and those couples making $170,000 and filing jointly.
The new plan also makes the amount of the benefit fully refundable. In addition, parents do not have to be employed to get the tax credit.
There is also no limit to the number of children parents or guardians can claim.
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The tax credits are also in addition to the $1,400 in direct payments available to individuals earning up to $75,000 a year, or $2,800 for couples making up to $150,000 a year.
The House is expected to vote on the bill this week before it makes its way to Biden’s desk to sign into law.