# The American Family Act of 2021: What It Means for Families

This bill makes major changes to how the government helps families with children through taxes. Right now, families get a child tax credit of up to $2,000 per child, but there's a catch—if you don't earn enough money, you can't get the full benefit. This bill fixes that problem by making the credit "fully refundable," which means every eligible family gets the full amount, even if they owe little or no taxes. It also increases the credit significantly: families would get $3,000 per child ages six and older, and $3,600 per child under six. These amounts would automatically increase each year to keep up with inflation.

The bill creates a monthly payment system so families don't have to wait until tax time to get this money. Instead of getting one big check when they file taxes, families would receive payments throughout the year—roughly $250 per month for each child six and older, or $300 per month for younger children. Families can use an online portal to update their information if their situation changes, like if they have a new baby or their income changes significantly. The government would send a notice each January showing how much was paid out during the previous year.

Income limits apply to this credit, meaning wealthier families receive less. For married couples filing jointly, the credit starts to reduce once income exceeds $180,000. For single filers, it's $130,000. The bill also provides a smaller $500 credit for other dependents like elderly parents or disabled adult children, though this benefit is temporary and only runs through 2025. Families in U.S. territories like Puerto Rico would receive similar benefits through their local tax systems. Overall, this bill aims to put more money directly into the pockets of families raising children, especially those with lower incomes who benefit most from the full refundability and higher credit amounts.

American Family Act of 2021

DeLauro, Rosa L.

American Family Act of 2021 This bill modifies the child tax credit to (1) make the credit fully refundable, (2) increase the amount of the credit and allow an additional credit for children who are under six years of age, (3) require the amount of the credit to be adjusted annually for inflation, and (4) require the Department of the Treasury to establish a program for making advance payments of the credit on a monthly basis.