Starting Thursday, the parents of 1 million children in Colorado will look inside a mailbox or bank account and see a monthly check worth $250 or $300 per kid.
For the first time in U.S. history, the federal government is sending monthly checks to couples with children who make less than $150,000 and single parents who make less than $75,000 as part of a new $120 billion social safety net program known as refundable child tax credits.
Eligible parents will receive $300 per month for children under the age of six and $250 per month for older children up to age 17. People who filed tax returns in 2019 or 2020 will receive the money automatically. Others must sign up online at IRS.gov.
The program is a rethinking of benefits for parents. Since 1997, the federal government has allowed parents to deduct a portion of the taxes they owe (known as a child tax credit). But those benefited only parents who earned enough money to owe federal taxes, leaving out the poorest — including those of 350,000 Colorado kids.
A group of Democrats in Congress, including U.S. Sen. Michael Bennet of Colorado, created the refundable child tax credit, meaning it is paid out during the year rather than once at tax time, and will reach poor parents as well.
Critics warn the checks will disincentivize work, but Bennet believes in what’s been a years-long push for him.
“This is the biggest investment in kids and families in the middle class since Lyndon Johnson was president over 50 years ago,” Bennet said Wednesday. “It’s the most progressive change to America’s tax code ever.”
The payments will end in December, though Bennet and other lawmakers are working to make them permanent. Parents will be able to deduct any remaining credits from their 2021 taxes when they file their taxes next year.
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