Families with kids, check your bank accounts. Starting now, the balance should look a little higher.
July 15 is when the vast majority of families across the country started receiving monthly payments that will continue throughout the rest of this year. The payments are part of the American Rescue Plan, the comprehensive relief package that President Joe Biden signed in March.
This new law is one of the most significant lifelines to American workers and families in generations, and it includes two ideas we have long championed. It expands the earned income tax credit, which will make hard work pay off for more people. And it expands the child tax credit, the payments starting this week, to help families keep up with the rising costs of raising children.
From suburbs and cities to small towns and rural communities across the country, a whopping 90% of kids and their families will benefit from the newly expanded CTC credit. Middle-class families and families working to join the middle class are all eligible to receive the full credit of $3,600 per child under age 6, and up to $3,000 per child ages 6 through 17. Families will receive up to $250 a month for each child, and $300 a month for every child under 6.
We expanded the CTC to families that previously made too little to qualify as well as families making up to $150,000 per couple or single-parent households making up to $112,500. In total, 39 million families with kids will receive payments starting last week.
The expanded CTC alone has the potential to cut child poverty in America almost in half, including by 45% for Hispanic children, more than 50% for Black children and more than 60% for Native American children.
President Biden's Rescue Plan also triples the earned income tax credit for low-paid workers without children. Until now, the credit has been worth less than what many of these workers pay in federal taxes, meaning Washington has essentially been taxing them further into poverty. We put an end to that for this coming year, while broadening eligibility for younger and older workers. These changes alone will boost incomes for 17 million people nationwide.
The idea behind these two expanded credits is simple: The best way to revive our economy and support America's long-term economic recovery is by directly supporting the people who power it — workers and families.
In our conversations across New Jersey, Colorado, Ohio and Georgia, we've heard much of the same thing: People are working harder than ever, sometimes working two or three jobs, but their work doesn't pay off. Meanwhile, the cost of everything is up — health care, housing, child care. People still can't afford a middle-class life, no matter how hard they work.
The child and earned income tax credits will do more to empower families and reward work — including caregiving work — than any proposal in generations. A single parent in Toledo working for minimum wage could see a nearly 30% boost to her income this year. A family in Newark with a toddler could receive support to cover four months of child care. A couple in Savannah with two young kids could see up to $600 more a month in their bank account for the rest of the year. A low-paid childless worker in Rifle, Colorado, could receive nearly $1,000 more from the EITC expansion to help make rent.
For millions of workers and families, this will be the difference between stress and security, between poverty and opportunity.
The tax credits in the American Rescue Plan are a historic investment in our country's greatest asset: our people — our kids, our families, our workers.
Cory Booker (@Cory Booker) is a Democratic senator from New Jersey. Michael Bennet (@SenatorBennet) is a Democratic senator from Colorado. Sherrod Brown (@SenSherrodBrown) is a Democratic senator from Ohio. Raphael Warnock (@SenatorWarnock) is a Democratic senator from Georgia.