Child tax credit: More than $ 15 billion in payments distributed on Friday
More than $ 15 billion was sent to the families of about 61 million children, the Treasury Department and the IRS said.
Eligible households have received a total of more than $ 61 billion since the first monthly payment in July.
Most parents automatically get the enhanced credit of up to $ 300 for each child up to age 6 and $ 250 for each age 6 to 17. The IRS is expected to send two more monthly payments in 2021.
Low-income households may not get the payments if they haven’t filed tax returns for 2020 or 2019 or if they haven’t used the IRS tool to claim their coronavirus stimulus checks. According to the Treasury Department, up to 2.3 million children could belong to families that have not filed recent returns.
Some 13% of eligible low-income households did not receive the first two monthly payments and did not know how to claim them or why they did not get them, according to a recent survey by the Poverty Solutions initiative in the United States. ‘University. from Michigan.
The survey looked at 3,000 families with children under the age of 18 who use a mobile app created by Propel, a tech company, to manage their food stamp allocations.
Parents who responded to the survey in Spanish were less likely to say they received child tax credit payments in July and August than those who responded to a survey in English. This, along with other results, suggests that more awareness is needed for Spanish-speaking households, Poverty Solutions found.
âIt is important that we take additional steps to ensure that the CTC reaches and supports all eligible children and families who may benefit from this important investment,â said Natasha Pilkauskas, co-author of the survey analysis. and associate professor at the University of Michigan.
The first two child tax credit payments lifted 3.5 million children out of poverty, according to a recent estimate from the Center on Poverty and Social Policy at Columbia University. The child poverty rate was 11.5% in August, but it would have been 16.2% without the subsidized loans.
The upfront payments have also led to a 25% drop in food insufficiency among low-income families with children, the center estimated.
Some 75% of low-income families reported using the extra funds to pay the bills, found poverty solutions. About 14% said they used the money for school supplies and 11% spent it on clothes or school uniforms.
Middle-class Americans also benefited from the monthly payments, the Treasury Department said, citing two studies.
Some 55% of middle-income families spent the funds on food, 26% on clothing and 23% on school and extracurricular expenses, according to a household census survey conducted in the weeks following the July payment.
And some 42% of middle-class households said they would contribute to their children’s college funds, and 24% plan to use the money to pay for child care, according to a recent Social Policy Institute survey. the University of Washington.
Here’s what else you need to know about the expanded child tax credit
The full enhanced credit is available to heads of households earning up to $ 112,500 per year and joint filers earning up to $ 150,000, after which it begins to disappear.
For many families, the credit then tops out at $ 2,000 per child and begins to wane for single parents earning over $ 200,000 or for married couples with incomes over $ 400,000.
More low-income parents are eligible for the child tax credit because the March coronavirus relief program made it fully refundable. It had only been partially repayable – leaving more than 26 million children unable to get full credit because their families’ incomes were too low, according to Treasury Department estimates.
About half of black and Latino children, as well as children living in rural communities, received only partial or no credit due to their families’ low incomes before the improvement, the Left Center said. on budgetary and political priorities. .
Parents who are not citizens can receive payments for their child citizens as long as they have individual taxpayer identification numbers, or an ITIN, and their children have Social Security numbers.
How much will I get?
It depends on your household income and the size of your family.
Eligible families can receive up to $ 3,600 for each child under age 6 and up to $ 3,000 for each age 6 to 17 for 2021. This is an increase over the credit for Regular child tax of up to $ 2,000 for each child up to age 17. .
When will I see the money?
Parents will receive half of their credit on a monthly basis until the end of the year. Payments will be made on the 15th of each month, unless it falls on a weekend or a holiday.
They can claim the other half when they file their 2021 taxes next year.
Those who don’t get their monthly payments until later in the year will still get half the credit in 2021.
Families who wish to receive the payments as a lump sum can opt out of the monthly payments on the IRS portal.
Some parents may not want to receive the monthly payments, especially if their income increases this year. Payments are family tax credits for 2021, but are based on 2020 or 2019 income and household size. Some who get the early loans could end up receiving much lower repayments – or even owing taxes – next spring when they file their 2021 returns.
Lawmakers, however, have protected low-income parents from possible overpayments. Heads of households earning $ 50,000 or less and joint filers with income of $ 60,000 or less will not need to repay overpayments.
Do I have to do something to get it?
The vast majority of families get the credit automatically because they filed 2019 or 2020 returns claiming the credit.
The IRS portal has been criticized because the tool is only in English and does not work well on cell phones.