What You Need to Know the American Rescue Plan
This past spring, the American Rescue Plan – a $1.9 trillion COVID-19 relief package -- was signed into law. The plan marked a significant step toward a stronger, more robust future for children and families across the nation. The professionals at Frisco Bookkeeping and Tax Services are proud to share key information about this initiative, as well as data on how to unenroll in the event that you wish to decline its assistance.
The American Rescue Plan
The American Rescue Plan is an economic stimulus package signed into law this past March of 2021. The $1.9 trillion piece of legislation includes stimulus checks, child tax credits, emergency unemployment benefits, and small business support.
Most likely, you’ve already received some of the benefits from the American Rescue Plan—including the most recent $1,400 stimulus check sent in late March. In addition to direct aid for parents and families, this initiative includes vital investments in the child care industry, an extension of the Child Tax Credit, and additional support for housing and nutritional assistance.
The Child Tax Credit
The American Rescue Plan Act includes a one-year expansion of the Child Tax Credit (CTC) to support families with children. If you earn less than $75,000 annually, you’ll receive $3,600 per child under the age of 6 and $3,000 per child between the ages of 6–17. If your income exceeds the earnings threshold, the credit will be reduced by $50 for every additional $1,000 of income. Individuals earning over $95,000 or joint filers earning $170,000 will not be eligible for the tax credit.
Payments begin in July
The CTC payments will begin in July and continue for one year. No application is necessary; however, the income must be included with the tax return that you file. Although the Child Tax Credit is an automatic opt-in, you do have the option to unenroll by utilizing the IRS online portal three days before the first Thursday of the next month. For parents who are married and filing jointly, both spouses must unenroll. For more information, please use the IRS online portal (https://www.irs.gov/credits-deductions/child-tax-credit-update-portal).
Helping the child care industry
The American Rescue Plan includes $40 billion in long overdue and essential funding for child care. This support will help provide essential programming to combat the child care crisis. The bill includes a $25 billion emergency stabilization fund and an additional $15 billion in funding for the Child Care and Development Block Grant, ensuring child care providers can safely operate, increase pay and benefits for child care workers, and reduce costs for families. The professionalization of child care is essential—and we’re excited to see this powerful investment.