Parents Could Be Entitled to Up to $5,000 per Child Under the New Coronavirus Stimulus Bill

How much will you be entitled to receive?

With millions in need of coronavirus resources, President Joe Biden laid out an ambitious plan to help Americans cope with the financial impact of COVID-19. Congress has since moved quickly to turn his proposal into legislation, and a bill will soon make its way to the president's desk to sign.

For parents, the coronavirus stimulus bill will provide generous financial help. In fact, some families are entitled to as much as $5,000 per child under the terms of the legislation. Here's how the math works on this payout.

Stimulus checks plus an expanded tax credit could add up to $5,000 per child

The $5,000 per child payment could come from two different provisions contained within the COVID-19 legislation:

• $1,400 stimulus checks: These are available for adults, as well as for eligible dependents. Anyone who is claimed as a dependent can qualify, including college students and other adult dependents.
• An expanded Child Tax Credit worth up to $3,600. Parents with children under the age of six could be eligible for a $3,600 tax credit. Those with older children could be entitled to a $3,000 tax credit.

The $1,400 stimulus checks are available in full to single tax filers with incomes up to $75,000 and married joint filers with incomes up to $150,000. Payments phase out entirely once income hits $80,000 for singles and $160,000 for married joint filers.

The expanded Child Tax Credit would also be available in full with an income up to $75,000 for singles, and $150,000 for married joint filers, with eligibility phasing out for higher earners.

The Child Tax Credit is actually an expansion of an existing tax credit that's in place. This tax credit currently provides $2,000 per eligible child, but only $1,400 is refundable. And only people who earn at least $2,500 could qualify in the past, but the expanded credit authorized by the COVID relief bill now eliminates this minimum income qualifier.

The upper income limits for the existing credit are $200,000 for single filers and $400,000 for married joint filers. Those will remain in place for the existing credit, enabling higher earners to claim the $2,000 they're currently entitled to even though they won't be eligible for the new higher credit amount.

When will parents get their money?

The $1,400 stimulus checks will start being deposited into Americans' bank accounts soon. Once Biden signs the legislation, many people could begin to receive their checks as early as this month.

Traditionally, parents had to wait to claim the Child Tax Credit until they filed their tax returns. However, the COVID relief bill aims to change this and have the IRS begin distributing payments from July 2021 through December 2021. Half of the payments would be made via these periodic payments, with parents able to claim the other half on their tax return.

That could mean that under the terms of this bill, eligible parents will receive a whopping $5,000 per eligible child from the government -- with most of the money delivered by the end of 2021. That's likely to make a huge difference in many family's budgets.