American Family Act

Key Points

• The bill replaces the current annual child tax credit with a monthly payment of $300 per child aged 6 to 17 and $360 per child under 6 (120% of $300). For a newborn's first month, the payment jumps to $2,400 (800% of $300).
• The credit is fully refundable, meaning families receive the full payment even if they owe no federal income tax. This is designed to reach the lowest-income families who currently miss out on part or all of the existing credit.
• Payments phase out for higher earners. Joint filers start losing the enhanced amount above $150,000, with a second phaseout beginning at $400,000. Single filers see phaseouts at $112,500 and $300,000.
• The IRS must build an online portal in multiple languages so parents can sign up, report changes like a new baby or address change, and start or stop receiving monthly payments.
• Monthly payments are protected from garnishment, offset, levy, and seizure in bankruptcy, ensuring families actually receive the money. Financial institutions must follow specific rules to shield these deposits.
• The bill terminates the existing annual child tax credit under Section 24 for tax years after 2024, replacing it entirely with this new monthly system. Dollar amounts adjust automatically for inflation each year.