How Can the American Rescue Plan Act Help Your Family?

The ARPA offers a number of benefits for families. Monkey Business Images/Shutterstock

Dear Readers: With most eligible individuals having already received their $1,400 stimulus payment, it’s easy to overlook some of the other benefits of the recent American Rescue Plan. Of course, the extra money upfront will make a significant difference to many struggling families. And even if you’re caught up on your bills, these economic impact payments could be a welcome boost to your emergency fund or your investments.

The American Rescue Plan Act (ARPA) has a number of additional benefits for families that I want to highlight. Even if some don’t apply to you, you might be able to pass the information on to family and friends who could take advantage of them. Here are some I think are worth noting.

More Money for the Child Tax Credit in 2021—and a New Way to Get It

Parents with minor children get a big increase in the Child Tax Credit, from $2,000 per child up to age 16 to $3,000 for kids ages 6 to 17 and $3,600 for kids under 6. Plus, this credit is now fully refundable, meaning it reduces your tax bill dollar for dollar, and any amount over your tax bill will be refunded to you in cash. From July through December 2021, parents are scheduled to receive the credit in monthly payments (which would amount to half the yearly credit) and apply the remainder to their 2021 taxes.