The COVID-19 bailout bill passed this year includes a poverty alleviation measure that will provide monthly benefits to families, including 88 percent of U.S. children, beginning in July, Biden administration officials said Monday, the latest development in the slow growth of Universal Basic Income (UBI). This is the latest progress in the slow growth of Universal Basic Income.
The Democratic-backed American Rescue Plan, which was signed into law by President Joe Biden in March in response to the coronavirus pandemic, expands the tax credits available to most parents.
The U.S. Treasury and IRS also announced increased CTC payments, which will be paid on the 15th of each month, allowing families who receive the credit through direct deposit to plan their budgets before and after receiving benefits. Eligible families can receive up to $300 per month per child under age 6 and up to $250 per month per child age 6 and older.
Yahoo Finance reports that the U.S. Treasury Department announced Monday that starting July 15, about 39 million U.S. families will begin receiving a regular $300 child tax credit (CTC), a new benefit in the latest stimulus package.
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The $1.9 trillion U.S. bailout package includes a one-year expansion of the CTC, an increase in the credit and permission to issue the credit early and regularly. Democrats want to extend the enhanced credit through 2025 as part of their infrastructure plan.
The report notes that the maximum tax exemptions for children under 6 and children between the ages of 6 and 17 would be $3,600 and $3,000, respectively, in 2021. Previously, the maximum tax credit for children under the age of 17 was $2,000.
Families of approximately 65 million children (88% of U.S. children) will be eligible to pay via direct deposit, paper check or debit card.
In addition, the IRS (Internal Revenue Service) is developing a portal where taxpayers who qualify for the tax credit can update information about their income, marital status or dependents.
The Biden administration says it is one of several measures that could lift more than 5 million children out of poverty, equal to half the total number of children in poverty in the United States, Reuters reports.
Officials are trying to help the economy recover from the pandemic. However, recent signs of rising inflation have raised concerns that these costs could erode incomes and increase inequality, which has been exacerbated by the Fed’s actions since the global financial crisis. Biden asked Congress to extend the tax credits through 2025, Reuters noted.
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