Federal Government Began Disbursement of Monthly Child Tax Credits This Week

This week, the federal government began the disbursement of monthly Child Tax Credit payments that were included in the American Rescue Plan Act passed by Congress earlier this year. Speaker Carl Heastie and Ways and Means Committee Chair Helene Weinstein today remind New Yorkers that legislation passed earlier this year by the Assembly and enacted into law will exempt COVID-19 stimulus relief payments for individuals and families with children from seizure to satisfy money judgments, including these monthly Child Tax Credit payments (A.6617, Weinstein, signed into law as Laws of 2021, chapter 107).

“The monthly Child Tax Credit will help families struggling to get back on their feet after the COVID-19 pandemic and it will help reduce childhood poverty,” said Speaker Heastie. “Taking that money from families when they need it most would be counterproductive, and that is why my colleagues and I enacted legislation to ensure the money gets used as it was intended.”

“The Child Tax Credit payments are intended to help families that are struggling to make ends meet during this unprecedented time and to help end childhood poverty,” said Assemblymember Weinstein. “These funds were not intended to be siphoned away by debt collectors, and the legislation we enacted earlier this year will assure families do not have to worry about that happening.”

The federal laws that authorized stimulus relief payments did not consistently include explicit language designating the relief payments as protected from seizure to satisfy judgments, from set-off, or from transfer or assignment. Legislation passed by the Assembly that has been enacted into law will exempt COVID-19 stimulus relief for individuals and families with children from these forms of garnishment, ensuring such funds are used to assist families and stimulate the economy. 

Under state and federal law, certain funds of an individual are considered exempt and therefore cannot be taken from an individual’s bank account to pay a judgment. Examples of exempt funds include, but are not limited to, social security, social security disability, public assistance, veterans’ benefits, unemployment insurance and child support.