How the new 2021 'child tax credit' works, and what it means for North Country families

Creative commons photo from Piqsels.

Mar 11, 2021 —

Congress sent President Joe Biden the landmark $1.9 trillion COVID-19 relief bill on Wednesday, after the he House passed the bill today over solid Republican opposition. 

Republican Congresswoman Elise Stefanik voted against the bill, calling it a partisan spending package stuffed with “a Far-Left wish list.” She also said a trillion dollars of existing stimulus funding that hasn’t been spent yet.

There’s a lot in the relief bill to unpack. One of the biggest things on that "wish list" is the transformational new child tax credit for 2021. It will have huge impact on low and middle income families, and paves the way for a universal family income. 

Imagine going out to your mailbox each month, and picking up a $300 check for each of your children. That’s what the new child tax credit will look like.

The current child tax credit is up to $2,000 per child per. Under the new stimulus bill, it’ll jump to $3600 a year for kids under 5, and $3000 for school aged children up to 17. 

In perhaps the biggest change, the new credit is available to way more families.

Under the existing system, if you don’t have enough income, you get no, or only a partial, child tax credit. That leaves out the poorest families, and the ones for whom a few thousand dollars would mean the most. Under the new bill, full benefits extend to single parents with incomes of $112,500 and couples with $150,000. It includes the poorest families, and includes more middle class ones. 

NY Senator Kristen Gillibrand says she hopes it will help fill in gaps for families.  

“Provide more resources for food, for clothing, extracurricular and afterschool activities…the kinds of things that parents cannot afford right now. As well as just putting food on the table.”

Another big change is how families will receive the money. Currently, it comes once a year, as a reduction in your taxes. Starting in July, the new tax credit will come in monthly installments –checks in the mail or direct deposits for each child. It’s much like the child allowances in places like Canada and Sweden.

And there are no strings attached. The money can be used for groceries, or utilities, or child care.

“It just makes such a big difference to people. What I think could happen is [it] gives parents options," says Cathy Brodeur, who directs the Jefferson-Lewis Child Care project. "If you know you’re going to get the tax credit every month, you can budget that for child care, you can budget that for a particular thing, which frees you up to address other issues."

Brodeur says for a low or middle income two child family, $600 reliable dollars a month would mean a lot. It could get kids into child care and parents back to work. And reliable tuition is good news for child care providers, too. “It could be a stabilizing influence on child care programs as well.”

Right now, the money hike and monthly installment plan is limited to 2021, as a part of COVID-19 relief. The increase and monthly installments will expire at the end of the year. 

Critics would like it to stay that way. They predict it will contribute to a ‘welfare state.’

Brodeur says this is a chance to try and see, to actually measure the impact of a universal income for families.

“It’ll get a test. It’ll get a chance to see, is this something that works for our economy and our families and our children?Because if it does, let’s extend it. Every family having options and being able to make decisions and able to succeed really shouldn’t be a short term prospect.”