American Rescue Plan's Child Tax Credit Could Have Profound Effect On Poverty In The US

MIAMI (CBSMiami) - The new child tax credit in the latest coronavirus economic relief plan passed by Congress and signed into law by President Joe Biden will provide extra money to many American families. Experts believe it could potentially have a profound effect on poverty in this country.

Individuals making up to $75,000 and couples earning $150,000 or less will receive $3,600 per child under the age of 6 and up to $3,000 for children ages 6 to 17. An increase from the previous $2,000.

Isabel Sierra and her husband have four children and have struggled to make ends meet during the pandemic. She says it has been "very hard." She previously didn't make enough to receive a child tax credit but will under this legislation. The new benefit does not require parents to have a job or earn a minimum income.

"It's the biggest single action toward reducing poverty that's been taken in a long time," said Elaine Maag with the Urban Institute.

Maag is among the experts who believe the new money could help lift at least four million children out of poverty. The legislation aims for payments to be made monthly and start this summer, but right now the measure only lasts a year.

"What happens after that? It's unclear," Maag said. "We do have a history of it being very difficult to take away benefits in the tax system once we have them there."

Democrats are expected to push to make the credit permanent, while Republicans are offering their own proposals.

The payments could add up to more than $13,000 for Sierra on top of the new stimulus check.

"It will help out a lot, get her kids clothes, get them whatever they need, save money for the future," Sierra said.

She added it could also help her afford childcare so she can work more.