The American Rescue Plan: How It Impacts You and Your Family
This spring, the American Rescue Plan, a $1.9 trillion COVID-19 relief package, was announced and marked a critical step toward a stronger, more robust future for children and families across America.
The American Rescue Plan includes a number of powerful benefits for children and families—including tax credits for families with children and additional funding to provide more options for high-quality, affordable child care. Keep reading to learn more about how the American Rescue Plan will impact you and your family.
Q: What is the American Rescue Plan?
A: The American Rescue Plan is a large economic stimulus package that was signed into law in March 2021. The $1.9 trillion piece of legislation included stimulus checks, child tax credits, emergency unemployment benefits, small business support, and more.
This bill has direct implications for children and families. For more information on all the American Rescue Plan offers, click here.
Q: How will the American Rescue Plan help families?
A: Most likely, you’ve already received some of the benefits from the American Rescue Plan—including the most recent $1,400 stimulus check sent in late March. In addition to direct aid for parents and families, the American Rescue Plan includes vital investments in the child care industry, an extension of the Child Tax Credit, and additional support for housing and nutritional assistance.
Q: What is the Child Tax Credit?
A: The American Rescue Plan Act includes a one-year expansion of the Child Tax Credit (CTC) to support families with children.
If you earn less than $75,000, you’ll receive $3,600 per child under the age of 6 and $3,000 per child ages 6–17. If your income exceeds the earnings threshold, the credit will be reduced by $50 for every additional $1,000 of income. Individuals earning over $95,000 or joint filers earning $170,000 will not be eligible for the tax credit.
Q: When does the Child Tax Credit begin?
A: The payments will begin in July and continue for one year. No application is necessary; however, taxes must be filed. Learn more here.
Although the Child Tax Credit is an automatic opt-in, you do have the option to unenroll using the IRS online portal three days before the first Thursday of the next month. For parents who are married and filing jointly, both spouses must unenroll. Learn more about how to opt-out of the Child Tax Credit from the IRS here.
Q: How does the American Rescue Plan help the child care industry?
A: The American Rescue Plan includes $40 billion in long overdue and essential funding for child care, the most significant investment in the child care industry since World War II. This support will help provide essential programming to combat the child care crisis.
The bill includes a $25 billion emergency stabilization fund and an additional $15 billion in funding for Child Care and Development Block Grant, ensuring child care providers can safely operate, increase pay and benefits for child care workers, and reduce costs for families. The professionalization of child care is essential—and we’re excited to see this powerful investment.
Q: How much funding will North Carolina receive?
A: North Carolina received an unprecedented $1.3 billion for child care from the American Rescue Plan Act. $800 million is earmarked for child care stabilization funding, which helps existing child care providers in North Carolina reopen or stay open. An additional $500 million is available in flexible funding for child care development, which will help increase access to affordable and high-quality care throughout the state.
In May 2021, Governor Cooper released a statement of spending priorities for the COVID relief package, including early childhood education priorities. Learn more about his recommendations here.
Q: What else do I need to know?
A: The American Rescue Plan is a positive step forward in providing families with the support they need in the wake of COVID-19. Learn more about what else the American Rescue Plan offers here.
Resources
https://static1.squarespace.com/static/5743308460b5e922a25a6dc7/t/604aa2465cfc4a35b8a1c236/1615503943944/Poverty-Reduction-Analysis-American-Rescue-Plan-CPSP-2021.pdf
https://beatty.house.gov/media-center/announcements/american-rescue-plan-frequently-asked-questions
https://www.whitehouse.gov/briefing-room/legislation/2021/01/20/president-biden-announces-american-rescue-plan/
https://home.treasury.gov/news/featured-stories/fact-sheet-the-american-rescue-plan-will-deliver-immediate-economic-relief-to-families
The American Rescue Plan: What it means for children and families