Families Most at Risk of Missing Out on the Expanded Child Tax Credit
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The child tax credit is the largest ever -- $250 to $300 a month -- but many low-income households may not get the help for a variety of reasons, a Tax Policy Center report says.
The expanded and fully refundable child tax credit will help millions of children and their families in 2021. However, many low-income children may be left out due to their parents and guardians not filing a tax return in recent years or claiming economic impact payments provided under the Covid-19 relief legislation, a report by the Tax Policy Center says.
According to the White House, the child tax credit in the American Rescue Plan Act provides the largest child tax credit ever – and as of July 15, most eligible families began automatically receiving monthly payments of $250 or $300 per child without having to take any action.
But not all eligible children are receiving their payments yet. According to the report, using data from the U.S. Treasury Department, the Tax Policy Center has developed an interactive tool that identifies the ZIP codes where eligible families that may not be availing themselves of the expanded CTC reside.Knowing where these children reside can equip government and nonprofit outreach campaigns to tailor resources to the specific characteristics of their communities.
Even if eligible families are not in the tax system, the Internal Revenue Service can possibly find them using information from other sources. For example, if the child is enrolled in Medicaid and their family is participating in health insurance via the Affordable Care Act marketplaces, the IRS receives a Form 1095 verifying health insurance coverage, the report says.
To get the word out about the CTC, the White House and advocacy and community organizations have launched outreach campaigns to aid families in claiming the money. Families must sign up by Nov. 15 to start receiving monthly CTC payments.
However, the CTC monthly payment amount could change as lawmakers consider Biden’s Build Back Better plan limiting a child tax credit to one year rather than extending it through 2025.
For more information from the Tax Policy Center click here.
Andre Claudio is an assistant editor at Route Fifty.
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