How Americans Could Receive a $16,000 ‘Stimulus Payment’
Here’s What You Need to Remember:
The American Rescue Plan Act, signed by President Biden in March, made several benefits available to Americans, including $1,400 stimulus checks, an expanded child tax credit, extended unemployment benefits, and much more.
But one other provision makes it possible to get more money for claiming child care expenses through taxes.
“These credits aren’t the same as the new child tax credit payments that are coming in July. Instead, you can claim any qualifying expenses related to child care, such as a day care service or an in-home care provider you pay to watch your child while you’re working. You can claim up to 50% of your expenses, depending on your income,” the CNET report said.
This provision allows parents to claim up to $8,000 for one child or up to $16,000 for multiple dependents. Usually, those figures are $3,000 and $6,000, respectively. To qualify for those events, however, the household’s adjusted gross income (AGI) has to be under $125,000.
“If your income exceeds that amount, your tax credits will phase out at 50%,” CNET said. “For example, instead of getting $8,000, you’d now get $4,000. The credit rate phases down again to 20% for those with an AGI of $183,000, and remains 20% until the income reaches above $400,000.”
Only parents who have primary custody of their children are eligible for the credit.
So, how can parents claim this credit? According to the article, they can claim it when they do their 2021 taxes, in early 2022. Parents are advised to keep a detailed account of their child care expenses.
“The care may be provided in the household or outside the household; however, don’t include any amounts that aren’t primarily for the well-being of the individual. You should divide the expenses between amounts that are primarily for the care of the individual and amounts that aren’t primarily for the care of the individual. You must reduce the expenses primarily for the care of the individual by the amount of any dependent care benefits provided by your employer that you exclude from gross income,” the IRS says on its website.
As for the expanded child care tax credit, it will result in monthly checks going out starting this summer. In the meantime, President Biden proposed last week, as part of his American Families Plan legislation, to extend those child care tax credit checks through at least 2025. At the same time, Rep. Richard Neal of Massachusetts, the chairman of the House Ways and Means Committee, has proposed making those child care tax credits permanent. Whether either of those passes into law this year will be determined in the coming months.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver. This article first appeared earlier this year.