Texas parents get big tax breaks from COVID relief bill

Nearly 6.8 million Texans with children could receive monthly checks starting in July, under the new economic relief plan President Joe Biden signed into law Thursday.

Nearly one of three adult Texans would qualify for the aid, which would help 7.8 million Texas children, according to an analysis from the Institute on Taxation and Economic Policy, a Washington research firm.

The measure allows child tax credit money to be sent to families on a monthly basis. Families now claim the credit on their tax returns, and could continue to do so.

Families that choose to receive the monthly checks will still be able to claim a half-year’s credit on their tax return next year.

The checks will be up to $250 per child ages 6 to 17 and $300 per child under age 6: one-twelfth of the total annual advance amount.

The plan increases the child tax credit from the current $2,000 a year to $3,000 per child ages 6 to 17 and $3,600 for children under age 6.

Currently, the credit starts to phase out at $400,000 for married parents and $200,000 for other parents, but under the new proposal it would phase out starting at $150,000 for married couples, $112,500 for heads of households and $75,000 for individuals.

Under the new economic relief package taxpayers could further benefit from the benefit being fully refundable. Currently, taxpayers can receive up to $1,400 as a tax refund if their credits exceed their taxes but under the new bill they could receive the full $3,000 or $3,600 in tax credit, depending on the age of their child.

The relief bill’s changes to the tax are temporary and only in place until the end of the year.

This story was originally published March 11, 2021 at 3:24 PM with the headline "Texas parents get big tax breaks from COVID relief bill."