Child tax credit: 5 ways the stimulus package is expected to reduce poverty - CNNPolitics - 0 views
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President Joe Biden's sweeping $1.9 trillion relief package represents one of the largest federal efforts to reduce poverty in the last half century.
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The massive legislation, which the President is expected to sign Friday, provides aid to low-income Americans in numerous ways. Attention has focused on the third round of direct stimulus payments, but the bill also offers parents a guaranteed stream of income and gives childless workers a bigger tax break.
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The package's key measures are expected to slash the poverty rate by about a third and reduce the share of children in poverty by more than half, according to estimates from both Columbia University and the Urban Institute.
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The provisions would cut the poverty rate among Black Americans by 38%, Hispanic Americans by 43% and White and Asian Americans by around 24%
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The key change is that the tax credit will become fully refundable so that more low-income parents could take advantage of it.
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"Getting this far is a huge win and a sign of progress in the conversation, as well as immediately putting money in people's pockets," said Elizabeth Lower-Basch, director of the income and work supports team at The Center for Law and Social Policy, a left-leaning group.
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"I certainly don't think it's a done deal, but I think there's a lot more opportunity than there has been in the time that I've been working on these issues," she continued.
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The enhanced portion of the credit will be available for single parents with annual incomes up to $75,000 and joint filers making up to $150,000 a year.
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But there's one big catch. The benefits are all temporary -- a mix of one-time infusions and assistance that lasts no longer than a year.
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Families can receive a credit of $3,600 for each child under 6 and $3,000 for each one under age 18, up from the current credit of up to $2,000 per child under age 17.
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It provides direct payments worth up to $1,400 per person to married couples earning less than $160,000 a year, heads of households making less than $120,000 and individuals with incomes below $80,000.
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Those who have lost their jobs will continue to receive federal support through September 6. The relief package extends the $300 weekly boost to unemployment benefits and two key pandemic jobless benefits programs.
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The bill also calls for making the first $10,200 of unemployment payments tax-free for households with annual incomes under $150,000.
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Food stamp recipients will see a 15% increase in benefits continue through September, instead of having the enhancement expire at the end of June.
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This amounts to about $25 more per person per month, or just under $100 per month for a family of four.
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The package nearly triples the maximum credit childless workers can receive to $1,502, up from $543.
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The minimum age to claim the childless credit will be reduced to 19, from 25, and the upper age limit will be eliminated.