Biden's $300 Child Tax Credit: Who Qualifies and How to Get it

Ahead of President Joe Biden's address to a joint Congress on Wednesday, the White House announced the American Families Plan, which will be "an investment in our kids, our families, and our economic future."

This plan will expand on the American Rescue Plan, which provided economic support and relief during the COVID-19 pandemic, in order to make it easier for American families to break into and stay in the middle class and enable people to re-enter and remain in the workforce.

"It is not enough to restore where we were prior to the pandemic," the White House said in the plan's fact sheet. "We need to build a stronger economy that does not leave anyone behind – we need to build back better."

With the American Families Plan, Biden is hoping to extend these key tax cuts that benefit lower- and middle-income workers and families. One central part of the new plan is the expansion of theChild Tax Credit that was part of the American Rescue Plan.

Families will receive $300 or $250 monthly checks starting July 1 from the Internal Revenue Service (IRS).

"We fully expect to launch in July," IRS Commissioner Charles Rettig said at a Senate Finance Committee hearing. "We expect to launch with payments going out on a monthly basis."

The agency intends to debut an online portal on July 1 to allow it to send the child tax credit to families periodically this year, instead of as a lump sum at tax time, Rettig said. They can use the portal to inform the IRS of any changes to their households in 2021 or to opt out of monthly payments. Families who don't have access to broadband internet service can use paper forms or visit an IRS office, he said.

Families with children under age 6 will receive $3,600 annually per child, while those with children between 6 and 17 will receive $3,000 for each child annually. That's up from a maximum of $2,000 per child under 17. The enhanced portion of the credit is available for single parents with annual incomes up to $75,000, heads of households earning up to $112,500, and joint filers making up to $150,000 a year.

Democrats passed a one-year expansion of the credit as part of their $1.9 trillion relief bill in March, and have been pressuring Biden to make the credit permanent.

In total, the American Families Plan includes $1.8 trillion in investments and tax credits for American families and children over 10 years. It consists of about $1 trillion in investments and $800 billion in tax cuts for American families and workers.

The plan notes that while he will ensure that the wealthiest American "pay their share in taxes," no one making $400,000 per year or less will see their taxes go up. "Direct assistance to families in the form of tax credits paid on a regular basis lifts children and families out of poverty, makes it easier for families to make ends meet, and boosts the academic and economic performance of children over time."

According to the plan, the legislation expands the Child Tax Credit from $2,000 per child to $3,000 per child for age 6 and above, and $3,600 per child for children under 6. It also makes 17-year-olds eligible for the first time and makes the credit fully refundable on a permanent basis, "so that low-income families can benefit from the full tax credit."

For a family with two parents earning a combined $100,000 per year and two children under 6, the Child Tax Credit will add $3,200 per year in tax relief.

For a family with two parents earning a combined $24,000 per year and two children under 6, the expansion means even more, with a credit increase of $4,400 because the full credit was not previously available to them.

This credit also would be delivered regularly so families do not have to wait until tax season to receive a refund.

In the plan, Biden is calling on Congress to make permanent the temporary Child and Dependent Care Tax Credit expansion and the Earned Income Tax Credit expansion for childless workers.