New child tax credit rules could give your family a check every month for a year.

President Joe Biden’s $1.9 trillion stimulus plan is making its way through Congress this week. Along with a third stimulus check of up to $1,400 per person — including child and adult dependents — House Democrats are planning to unveil legislation to provide at least $3,000 per child to millions of American families as part of the proposal, as an update to the Child Tax Credit, the Washington Post reported. 

While Biden’s proposal and this potential change to the Child Tax Credit is not yet law, you may still be able to get more money back under the current version of the credit. At a basic level, the CTC is a credit parents can claim to help reduce their tax bill, depending on the number and ages of their dependents. For many, it may provide a much-needed source of relief as part of a 2020 tax year refund. 

Here’s everything you need to know about the CTC, including eligibility requirements for you and your kids, how much it’s worth and Congress’s prospective plans to enhance it.

What is the Child Tax Credit? 

The CTC is a $2,000 credit parents can claim on their taxes for every child under the age of 17 (the same age range for child dependents when it comes to the first and second stimulus checks). And if that credit exceeds the amount of taxes that a family actually owes, parents can still receive up to $1,400 of the balance as a refund; this is technically referred to as the “Additional Child Tax Credit” or refundable CTC. For example, a married couple with children ages 5, 10 and 12 would receive a total child tax credit of $6,000 — unless they’re due a refund, in which case they would receive $4,200.  

Families with older kids are also eligible: You can claim $500 for each child aged 17 and 18, or full-time college students between the ages of 19 and 24.

Note that although the eligibility requirements are relatively broad, higher-income families may receive a reduced credit. But married couples filing jointly with an adjusted gross income under $400,000 are eligible for the full amount, as are individuals with an AGI under $200,000. 

What does the CTC have to do with Biden’s stimulus bill?

Biden’s American Rescue Plan (PDF) called on lawmakers to expand the CTC. The proposal House Democrats are planning to release says that families with children aged 17 and under would receive a credit of $3,000, while those with children under the age of 6 would receive a $3,600 credit, according to the Washington Post. 

The size of the credit would start lowering for single people earning more than $75,000 per year, and married couples earning more than $150,000 per year. If approved, the payments would be sent monthly over the course of a year, starting in July.

Biden’s initial plan also called for families to receive a credit for child care. A family with one child could receive a total of up to $4,000 and those with two more children can receive $8,000. This tax credit would be refundable and available to families making less than $125,000 a year. A family with an income of $125,000 to $400,000 will receive a partial credit although the specifics of how much has yet to be announced. 

One analysis of the proposal from Columbia University found that it would cut the number of children in poverty by as much as 54%, or about 5 million children. More than 1 million Black children would be lifted out of poverty by the plan, the researchers found, according to the Post.