The massive $1.9 trillion coronavirus legislation poised to become law this week includes new help to parents in direct aid and child care tax credits that Democrats hope will become a permanent safety net.

The legislation expands the current $2,000 child tax credit into an advanceable and refundable tax credit that's worth $3,600 for each child up to age 6 and $3,000 for older children up to age 17.

What's unique about this tax credit is Congress calls on the IRS to pay out the credit in advance to families in a so-called "child allowance" that would arrive as direct payments ideally on a monthly basis, such as $300 extra a month for one child under 6.

The program is to start up 90 days after passage of the legislation, so qualifying families could see payments as soon as this summer, according to a congressional aide briefed on the bill.

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The amount of money received would phase out for individuals making more than $75,000 and for married couples making $150,000.

Democrats on the House Ways and Means Committee estimate this regular assistance will help lift 7.1 million people, including 4.1 million children, out of poverty.

The major boost only lasts for one year under the legislation, but Democrats are hoping the provisions are so popular that they will be extended.

"One thing you should know about the tax code is getting something out of the code is often much harder than getting something in the code," Rep. Richard Neal, chairman of the Ways and Means Committee, said Tuesday. "So I've already had some thoughts about how we're going to expand it and make it permanent. And I intend to share those in the near future. But what we did is unlikely to go away."

President Biden's coronavirus legislation aims to provide $300 monthly payment to parents with a child under the age of 6 for the next year. (iStock photo) 

In addition to the new direct payments, President Biden's coronavirus legislation includes an expanded benefit to parents paying for child care. The maximum benefit is worth an $8,000 refundable tax credit.

Under the new expanded child and dependent care tax credit, families making up to $125,000 would be able to receive a credit for half of their first $16,000 in child care expenses.

Families making up to $400,000 would be eligible for a credit for at least 20% of their first $16,000 in child care expenses.

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This new child care tax benefit would also only last for a year.

Republicans have united against Biden's coronavirus legislation saying the package is too big and not targeted enough on the virus. No Republicans in the Senate voted for the legislation on Saturday. The House is planning to pass the final version on Wednesday that is again expected to be a party-line vote.

House Minority Whip Steve Scalise

Asked about the new child care provisions Tuesday, Rep. Steve Scalise, R-La., said Democrats should not have included them in a coronavirus bill and such measures need to be debated separately.

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"Whether it's a good idea or not needs to be debated independently," Scalise, the GOP whip, said. "Don't take advantage of a crisis to try to ram through a socialist agenda."

Some Republicans have been open to the idea of establishing a monthly child allowance for families to fight poverty.

Sen. Mitt Romney, R-Utah, has proposed legislation that is even more generous than Democrats' plan. His Family Security Act would provide $350 a month to families with a young child and $250 a month for each school-aged child.

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The payments under Romney's plan would be administered through the Social Security Administration, which already handles the popular safety net program for senior citizens.



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