President-elect Joe Biden’s proposed COVID-19 relief package includes two hefty expansions of tax breaks for parents, which of passed would allow them to claims thousands of dollars more in credits and refunds for at least one year.
Biden wants to increase the standard child tax credit to $3,000 per child and $3,600 per child under 6. The current child tax credit is up to $2,000, according to the Internal Revenue Service.
The plan also would make 17-year-olds eligible to be claimed as a child for the year; currently, the cut-off is 16.
His proposal calls for making the child tax credit fully refundable for one year, meaning that lower-income households would receive the full amount. According to Biden’s office, 27 million children live in families with household incomes low enough that they normally don’t qualify for the full value of the child tax credit.
Biden’s proposal also includes an expansion of the child care tax credit on a one-year basis.
Families would get back as a tax credit as much as half of their spending on child care for children under the age of 13, up to $4,000 for one child or $8,000 for two or more children.
Families making less than $125,000 a year would receive the full 50% reimbursement, while families making between $125,000 and $400,000 would get a partial credit “as least as generous as those they can receive today,” according to Biden’s office.
Biden included the tax credits in the $1.9 trillion economic stimulus package he released earlier this week. The full package includes $1,400 stimulus checks for most Americans, an expansion of unemployment benefits and hundreds of billions of funding for schools, public services and COVID-19 vaccine distribution.
He has a good chance of passing much of the bill because his party will have majorities in both the House of Representatives and the Senate.