President Joe Biden speaks at an event with Vice President Kamala Harris (L) marking the day that families will get their first monthly child tax credit relief payments through the American Rescue Plan, at the White House in Washington, D.C., on Thursday. Photo by Alex Edelman/UPI | License Photo
July 15 (UPI) -- President Joe Biden on Thursday called payments going out to families as part of the expanded child tax credit "historic," saying they have the potential of lifting many families out of poverty.
Biden made his remarks at the White House late Thursday morning as payments reached some of the nearly 40 million families who qualified for the tax credits, affecting an estimated 65 million children.
"This is another step toward ending poverty in America," Biden said. "This is our belief that the people who really need the tax cut are not the people at the top, but the people in the middle; the folks who are struggling."
Biden compared the expanded child tax credit, approved under his American Rescue Plan passed earlier this year by Congress, to Social Security, which was passed in 1935.
"This has a chance to reduce child poverty in the same way Social Security reduced poverty for the elderly," Biden said.
Vice President Kamala Harris, who spoke before Biden, said that providing the tax credits in monthly payments allows the program to have a more sustained impact on families.
"If the struggle to make ends meet is monthly, then the solution must be also," Harris said. "The payments may be monthly, but the impact will be generational. This is the largest middle-class tax cut in a generation.
Qualifying families will receive a monthly payment of $300 per child under the age of 6 and $250 for children aged 6-17. The average payment is expected to be around $420.
Biden's rescue plan expanded the maximum credit for children younger than 6 to $3,600 and to $3,000 for children 6 years old and older.
Parents earning an adjusted gross income under $75,000 and couples earning less than $150,000 will be eligible for the full credit. The amount of the payments phase out for parents who earn more, and individuals and couples who make more than $95,000 and $170,000 are not eligible.
Qualifying households can elect to opt out of the monthly payments and receive the full credit all at once when they file their 2021 taxes.
Most families who have filed their taxes or used the IRS' non-filer tool in 2020 to receive their stimulus payments will not have to take action to receive their payments.
Those who don't earn enough income to file taxes, but have eligible children can register to receive the payments through the IRS non-filer tool.
About 80% of eligible families will receive the monthly child tax credit by direct deposit if the IRS has their direct deposit information, and the agency will send paper checks and debit cards to some families.
Officials say future payments will go out on the 15th of every month through the end of 2021, unless the date falls on a weekend or holiday. The IRS says the remaining payments are scheduled to go out on Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15.