Which Families Will Receive the Most Money From the Stimulus Bill?

Which Families Will Receive the Most Money From the Stimulus Bill?

Which Families Will Receive the Most Money From the Stimulus Bill?

Which Families Will Receive the Most Money From the Stimulus Bill?

The Covid-19 relief legislation signed by President Biden on Thursday includes a larger increase in direct aid to families than in any other pandemic relief bills passed so far — an average of $6,660 for households with children, according to an analysis by the nonpartisan Tax Policy Center.

For 500,000 poor families with two or more children, roughly $10,000 in aid will more than double their annual income. By some estimates, the bill could cut child poverty in half this year.

The bill accomplishes this in primarily two ways: a significant increase in stimulus payments per child, and a larger child tax credit that will benefit the lowest-income families in particular.

The coming stimulus checks are larger for adults than in the first two rounds — $1,400 per adult, compared with $1,200 per adult in a bill passed in March 2020 and $600 per adult in December. The same income thresholds apply for receiving the full amount: $75,000 for singles, $112,500 for heads of households and $150,000 for married couples, though the check amounts phase out much faster for earners above those levels.

The biggest increase is for children and other dependents. In the first two rounds, taxpayers received $500 and then $600 for each dependent child. This round includes $1,400 for each dependent child and adult dependent, which includes college students.

And unlike in previous rounds of stimulus, the child tax credit has been increased. It is now worth $3,600 per child under 5 and $3,000 per older child, from $2,000 per child. Low-income families will benefit the most, because they will now be eligible for the full amount, even if their tax liability is very low.

Previously, parents could deduct the $2,000-per-child credit from their tax liability. If they did not pay that much in taxes, they could be eligible to receive up to $1,400 as a refundable credit. Now, all parents will receive the full amount, with half of the value of the credit issued in advance beginning in July.

Income thresholds for the full child tax credit are the same as for the stimulus payments. The credits fully phase out for unmarried taxpayers earning $240,000 or more, and for married couples earning $440,000.


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