Last year’s expanded child tax credit (CTC) helped millions of families that were struggling financially due to the COVID-19 pandemic, but the program expired in December. Now, Senate Republicans have proposed one more program that would restart monthly child stimulus checks. However, the new child tax credit payments, if approved, would come with new requirements, as well as some limitations.
Monthly Child Stimulus Checks: Who Could Get Them?
Republican Sens. Mitt Romney of Utah, Richard Burr of North Carolina and Steve Daines of Montana proposed this new program, called Family Security Act 2.0. The proposal calls for giving fully paid-for monthly cash benefits to working families. Lawmakers refer to the proposal as a “pro-family, pro-life and pro-marriage plan.”
Q2 2022 hedge fund letters, conferences and more
Under the Family Security Act 2.0, eligible families would get $350 per month per child up to age 5, or $4,200 per year, while those with children ages 6 through 17 would get $250 per month (or $3,000 per year). The monthly child stimulus checks would be limited to up to six children annually.
Even parents expecting a baby would qualify to get the child tax credit four months before their child’s due date. To be eligible for the monthly child stimulus checks, families must have earned $10,000 in the previous year.
The child tax credit for families with income of more than $10,000 would be reduced proportionally. For every $1,000 above the income threshold, the credit amount would be reduced by $50. The credit amount would phase out completely at $200,000 for single filers ($400,000 for joint filers).
Family Security Act 2.0 May Not Benefit All
This new monthly child tax credit follows the expanded child tax credit that was approved by the American Rescue Plan Act 2021. Under the expanded child tax credit, families with a child under age 6 got $300 per month, while those with a child aged 6 through 17 got $250 per month.
The payment started to go out in July and ended in December. Families got half the credit amount in six monthly installments from July to December, and the other half at the time of filing their 2021 tax return.
According to the Center on Budget and Policy Priorities, the 2021 expanded child tax credit helped to reduce child poverty by about 30% as of December. In 2022, the child tax credit reverted back to $2,000 per child under 17 years with no advance monthly checks.
In new analysis, the Center on Budget and Policy Priorities noted that the new Family Security Act 2.0 proposal is a “welcome development.” However, the analysis also noted a "major flaw" with the proposal, and it is that children in families with little to no income would get some or no credit at all. This wasn’t the case with the American Rescue Plan Act, which temporarily made the credit fully refundable.
