The American Family Act establishes a new monthly child tax credit providing $300 per month for each child ages 6 and older and $360 per month for children under age 6, with higher amounts for newborns. The credit phases out for higher-income households starting at $150,000 for joint filers and $112,500 for single filers, disappearing entirely at $400,000 and $300,000 respectively. Eligible families—those with children living in their home for more than half the year—can receive advance monthly payments from the IRS starting the month after they confirm their child's information, with a 120-month ban on the credit for those caught committing fraud and provisions allowing makeup payments for those with qualifying hardships. Taxpayers must reconcile the annual credit against advance payments received, repaying any excess if their income or eligibility changes during the year. The bill also extends the program to U.S. possessions and includes protections preventing these payments from being garnished or offset for other debts.
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