Parents across the country will begin receiving monthly payments Thursday as a part of an expansion of the child tax credit under the American Rescue Plan.
The new payments will be up to $300 a month for children under 6 and up to $250 for children between the ages of 6 and 17. The amount of money parents can receive per child has increased by around $1000 overall. About 39 million households are eligible for the credit.
Guardians will receive the other half of the increased tax credit through their 2021 tax filings.
The bill also expands eligibility for the credits based on income and immigration status. Families who have not filed taxes in past years are also eligible for the monthly payments.
Democratic Rep. John Yarmuth spoke about the credit at the Louisville Urban League on Wednesday. Yarmuth was a sponsor for the American Rescue Plan and played a large role in its passage as member of the House Budget Committee.
“More than 46,000 families in Louisville will receive up to $300 per month per child for the rest of 2021 and even more when they file their taxes next year,” said Yarmuth.
Jason Bailey, Executive Director of the Kentucky Center for Economic Policy, said the state’s poorest families will see their income increase by about one-third due to the tax credit.
Sadiqa Reynolds, President and CEO of the Louisville Urban League, says it’s critical that families determine how to spend the money.
“Being poor does not mean you don’t understand what you need,” Reynolds said, “It doesn’t mean you don’t have the answers.”
Yarmuth hopes that both the monthly payments and increased amount of money per child can be extended to last beyond 2021.