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On July 7, 2021, while he travels to promote his economic ideas, US President Joe Biden asks a youngster his age while touring a youth development center at McHenry… [+] County College in Crystal Lake, Illinois. (AFP photo by SAUL LOEB) (Photo courtesy of SAUL LOEB/AFP/Getty Images)
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President Joe Biden continues to share his vision for America on a trip to McHenry County College in Illinois on Wednesday, July 7, 2021, with less than a week till the new Child Tax Credit takes effect. “To truly win the twenty-first century — and once again lead the world,” the President said. “To properly develop an economy from the bottom up and the middle out, to truly deal with everyone in this time, we must invest in our people,” he said.
While the President is promoting the concept of “generational human infrastructure” through a variety of programs targeted at assisting Americans, there are several moving parts to his goal. The deployment of the new Child Tax Credit, which is set to begin on July 15, 2021, is one of the significant investments he aims to make. Biden wants to make it clear that this credit is aimed to help Americans.
He underlined during the ceremony, “You will not receive a tax credit; instead, you will receive cash. Cash. You will receive the first half of the $3,600 between July and December, and the remainder between January and Tax Day.”
But it isn’t all he desires. Biden also wants to go it a step further by extending the incentives for Americans who qualify until 2025.
How Does The Credit System Work?
ADDITIONAL INFORMATION FOR YOU
The Child Tax Credit was dramatically enhanced under the Americans Rescue Act. Taxpayers with children under the age of five will receive a $3,600 credit per child. This credit will be $3,000 for children aged 6 to 17. Families with modified adjusted gross incomes (MAGI) of $75,000 or less for single taxpayers, $112,500 for head of household filers, and $150,000 or less for joint filers will be eligible for the benefit. These income limits will be phased out over time.
But what makes this new credit special is that the first half of it will begin paying monthly on July 15th, directly into the bank accounts of eligible American households. This translates to monthly payments of $250 or $300, depending on the age of the child. Supporters of the credit believe it will benefit both middle- and lower-income families. Indeed, the Center on Poverty and Social Policy at Columbia University estimates that this additional credit might reduce youth poverty by 45 percent.
This concept is supported by the Biden Administration. “This tax cut will provide our nation’s hardworking families with children a little more breathing room when it comes to putting food on the table, paying bills, and making ends meet,” Biden said in a statement on the Child Tax Credit released on June 21, 2021.
Increasing The Credit Limit
While these figures are encouraging, the fact that this new tax credit is only valid until 2021 has presented a hurdle. As a result, it’s unclear whether the benefit would have a long-term impact if it were to expire after the 2021 tax filing season.
As a result, the President’s remarks are significant. For Americans that qualify, he believes the credit should be extended until 2025. He plans to accomplish this through the American Families Plan, which Democrats are attempting to pass through Congress.
An extended credit would have a huge impact. The $3,000 or $3,600 benefit for American families that receive it for five years might drastically alter their financial situation. Lower-income Americans will be able to offer their children with a more constant environment. This might allow middle-income Americans to save for education or assist pay for daycare.
The Upcoming Challenges
However, the Biden Administration faces a difficult task in extending credit. The extension would be part of a $1.9 trillion proposal that the administration is attempting to pass through Congress. As a result, achieving success may not be straightforward.
In addition, there are administrative issues to address. The IRS will be in charge of administering this credit. The IRS, on the other hand, is currently slowed by long lines and unopened mail. The IRS has successfully implemented a tool that allows Americans to sign up for or opt out of the tax credit.
It is up to the taxpayers to decide.
If the tax credit proves to be a success in 2021, it will be easier to justify increasing it until 2025. It appears that this will be a key part of Biden’s legacy./nRead More

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