FRANKFORT, Ky. (LEX 18) — On July 15, most parents in Kentucky will likely find their first monthly child tax credit payment in their bank accounts.
39 million American families will get some amount of money every month for the rest of the year. How much depends on how many kids you have, how old they are, and how much money you make.
The payments are made possible by the American Rescue Plan, which boosted the child tax credit amount and sent half of it directly to the people through monthly installments.
Normally, parents get a $2,000 tax credit for each child and it applies entirely to annual tax filings. The American Rescue Plan will give parents $3,600 per eligible child under six years old and $3,000 per eligible child ages 6 to 17.
So, if your child is under the age of six, you can expect up to $300 per month for the rest of the year. If your child is six to 17, you can expect up to $250 a month.
Married couples with incomes less than $150,000 and single parents with incomes less than $112,500 will qualify for the full expanded credit.
The cash is meant to offset the high cost of raising a child. In Kentucky, the money will come in handy for many families. The latest Census information shows 37% of adults in Kentucky report having trouble affording regular household expenses.
"For the poorest one in five Kentucky families with kids - it will mean $4,240 more dollars this year in their pocket," said Jason Bailey, the executive director of the Kentucky Center for Economic Policy. "That lifts their family income by one-third."
The Kentucky Center for Economic Policy says nearly one million of Kentucky's kids will receive this benefit. That's 92% of the children in the state.
That's significant because kids are the single largest group of people who live below the poverty line. Bailey says 30% of Kentuckians who are poor are kids.
"The easiest way you can become poor in this country and in this state is simply by being born," said Bailey.
The monthly tax credit payments are expected to raise 44% of Kentucky's kids above the poverty line. But experts say this won't just help the poor. They believe it's going to help the middle class and communities in general because the monthly payments are kicking in at exactly the right time.
"We're coming out of the COVID-19 crisis, they will inject 1.6 billion into the Kentucky economy over the next year, which will provide an extra stimulus that will support businesses and communities as those dollars circulate," explained Bailey.
As of right now, the monthly payments are just going to happen this year. However, some in Congress want this to be a permanent thing.
Bailey believes that would create long-term solutions for child poverty.
"Social Security was similarly transformational for elder poverty and it wasn't for one year," said Bailey. "We shouldn't expect any less for our kids."