Most taxpayers can reduce their federal income tax bill up to $2,000, but the new COVID relief bill will increase your tax break and put money in your hands just for having a child.
For every child six to 17 years old, taxpayers will receive a tax break worth $3,000.
For every child under the age of six, they will receive $3,600.
Critics said the new credit would incentivize parents not to work, but economists say it will reduce the number of children living in poverty by half.
Tax expert Travis Watkins said you do not need to make any changes to your 2021 tax return information because the eligibility will be based on your 2019 and 2020 returns.
"This round is fully refundable,” Watkins said. “In other words, it does not just act as an offset to any taxes owed. It's actual money in your hands.”
This temporary tax credit could be seen in bank accounts this summer.
Watkins said the package also helps parents with $39 billion in childcare assistance and subsidized childcare for low-income families.