Use $1,000 child tax credit wisely
As the American Rescue Plan moves forward in Congress, you have probably heard that unemployment assistance will be extended to August, taxpayers will receive an additional $1,400 rebate, teachers and staff will continue to be paid with more federal funding to keep our schools open, there is more money for food aid and vaccinations, and the Commonwealth and municipal governments will share in half a billion dollars for operating expenses.
There is also new tax relief for working families, including permanent federal funding of the Earned Income Tax Credit and an increased Child Tax Credit. Currently, the Child Tax Credit is up to $2,000 per child through age 16. The Rescue Plan increases that to $3,000, makes 17-year-olds eligible, and for children 6 years old and under provides $3,600.
Child support payments like this have shown to boost academic achievement and improve children’s health and well-being. Long-term studies point to increased lifespans and higher incomes for those helped by these cash transfers.
One way to make this aid most effective is to pay it monthly rather than once at the end of each tax year. And the original version of the American Rescue Plan made that change from a yearly lump-sum to monthly payments – but only for families in U.S. states.
Working with the House Ways and Means Committee, I was able to get that fixed. Parents in the Marianas will also be eligible for advance monthly payments in the version of the bill the House is now voting on and will send to the Senate. Because monthly payments mean an extra administrative cost, I added $300,000 for the Commonwealth government. But the bill does allow the Governor to decide to stick with an annual payment, if he does not want the responsibility of cutting checks monthly.
One reason advance monthly payments are more helpful than an annual lump sum is because the money is available when needed. If your child’s sneakers wear out in August, you won’t have to wait to replace them. If you want to improve the quality and freshness of the food you serve your family, you will be able to use your monthly Child Tax Credit. You could even save some of that money each month, so it is available for college tuition or another big-ticket item for your child.
Ultimately, though it is up to parents to use these federal funds as intended: to improve your children’s health and well-being today and help them live in the years ahead as productive and happy adults.
The Senate still must act on the American Rescue Plan, and the President must sign the bill into law. But, if enacted as expected, the increased Child Tax Credit can make life better for your children and your family. Please, use it wisely.
Rep. Gregorio Kilili Sablan is a member of the U.S. Congress representing the CNMI