The American Rescue Plan Act (ARPA) was signed into law on March 11, 2021 and with all the extra money it provides, people are starting to wonder if it will affect their child’s eligibility for public assistance.  The answer is no for the most part.

The Economic Impact Payments, better known as stimulus checks, are technically a refundable tax credit, so they do not count in MAGI (Modified Adjusted Gross Income). There is no minimum income required. The maximum income to receive the full amount is $75,000 for single tax filers, $150,000 for a couple, $112,500 for head of household. There is $1,400 for each tax filer and $1,400 for dependents of all ages with a SSN. You can still claim previous stimulus checks by filing 2020 taxes and doing recovery rebates. You can check the IRS website if you have not received your stimulus check.

The Child Tax Credit was expanded and is expected to lift 4.2 million kids above the poverty line. It will be fully refundable for the 2021 tax year, so families with low or no income receive the max benefit. There is no impact on TennCare, CoverKids, SNAP, or TANF eligibility. The eligible children must have an ITIN (Individual Taxpayer Identification Number) or a SSN. Starting July 1^st, there will be an advance payment for half of the tax payment distributed to families of up to $250 for children ages 6 to 17 and up to $300 for children under 6. There will be six monthly payments. The amount families will receive each month will be based off 2020 taxes or 2019 taxes if 2020 tax data is not available. The second half of the tax credit will come in 2022 when 2021 taxes are filed. The total benefit is up to $3,000 per child over 6 including 17 year olds and up to $3,600 for children under 6. The maximum income to receive the full benefit is $150,000 for a couple and $112,500 for head of household.

The Child and Dependent Care Tax Credit was expanded and made fully refundable for the 2021 tax year, so even if you don’t have a tax liability you can claim it. Qualified dependents are those under 13 years old or those with mental or physical limitations preventing them from caring for themselves. The maximum amount of qualified child or dependent care expenses are up to $8,000 for one child and $16,000 for two or more children. The maximum benefit a family can receive is up to 50% of childcare costs. This is a maximum benefit of up to $4,000 for one dependent or $8,000 for two or more dependents. Income must be under $400,000 for maximum benefit.

The stimulus checks and tax credit refunds do not count toward income or asset limits for SNAP, TANF, TennCare, and CoverKids. They do not count as income in the month of receipt or month after receipt, and they are not counted as a resource or asset for 12 months after the month of receipt. This is from a tax provision and includes any advance tax payments as well.