(NEXSTAR) – On Thursday, President Joe Biden signed COVID-19 relief legislation that will provide direct aid to families amid the pandemic.
But who stands to benefit the most from the $1.9-trillion bill?
According to a new analysis by the Tax Policy Center, the American Rescue Plan will provide an average of $6,600 to households with children, with low-income families seeing the most in aid.
The lowest-income households — those making $25,000 annually or less — will see an average tax cut of $2,960, or 21.1 percent of after-tax income, according to the analysis.
Middle-income households (those making between $51,000 and $91,000) will garner a tax cut of $3,720, or six percent of after-tax income.
The nation’s top earners will see the most negligible tax cuts. After-tax incomes for those in the top .1 percent (those making about $3.5 million a year or more) would decline by about $970.
The boost to the child tax credit under Biden’s bill will give parents a total of $3,600 for every child under age 6, and $3,000 for each child under age 18 in 2021.
Previously, the credit was up to $2,000 for each child under 17.
Earlier estimates suggest that the bill could cut child poverty in the U.S. by half this year.
- The added payments this year would begin phasing out for couples making over $150,000, and couples making over $170,000 would see no added benefit, according to the New York Times.
- As in previous years, single filers making under $200,000 and married filers making less than $400,000 would still be eligible for the $2,000 payments.
- The frequency of the checks containing the first half of the payment is not yet solidified. The Treasury Department will determine how frequently checks can realistically be distributed.
- The remaining portion of the credit would still be claimed when taxes are filed.
- The credit would be refundable, meaning you could still get the credit even if you don’t end up owing taxes.
- Some Democrats have called for making the payments permanent.