Where’s my Child Tax Credit?
For the past six months, more than 61 million children in roughly 36 million families across the U.S. have received a monthly payment of $250 or $300 per child. Today, some parents may be surprised – in a very bad way – to learn that the monthly payments have ended. Tax credits that would have landed in families’ bank accounts beginning Friday, January 14 won’t happen because the Senate could not agree to extend them.
The initial expanded Child Tax Credit (CTC) was passed by Congress and signed by President Biden in March 2021, and payments began on July 15. These payments put food on hard-up families’ tables, helped keep people in their homes, and enabled families to afford things like child care, utilities, health care, prescriptions, clothes, and school supplies, just to name a few.
Why extend the CTC expansion? There are a number of reasons. Here are four.
First, the CTC payments have been proven to lower child poverty. In October, they reduced child poverty rates by as much as 28 percent, according to the Columbia University Center on Poverty and Social Policy. If the CTC expansion were in place over a longer period, it could cut child poverty by as much as 40 percent in a given year, according to the Urban Institute. And that would be good news indeed for the 10.5 million children who lived in poverty as of 2019.
Second, the expanded CTC payments help alleviate the scourge of racial inequality in the U.S. The Center on Budget and Policy Priorities estimates that 9.9 million children could fall back into poverty or deeper into poverty if the CTC expansion is not extended – and disproportionate poverty for Black, Latinx, and American Indian or Alaska Native (AIAN) children in particular would grow even worse. With no extension, poverty rates for Black children would be 22 percent instead of 13 percent; 21 percent for Latinx children instead of 12 percent; and 18 percent for AIAN children instead of 10 percent.
Third, the CTC expansion encouraged parents to join, or rejoin, the labor force. A Niskanen Center report found that the CTC actually promotes work by helping parents afford child care and transportation. Another study found that 94 percent of CTC recipients said they would work as much or more as a result of the payments.
Fourth, the expanded payments are needed right now, as much or more than ever before. New COVID-19 infection rates are currently higher than at any time during the pandemic. Millions have been displaced from the workforce. Many parents cannot work because school or class closures or quarantines are unpredictable and not infrequent. Without the payments, the number of families going without enough food is certain to rise – and households will struggle to cover rent and utilities, among many other costs. We all want the pandemic to go away, for COVID to surrender to our efforts to vaccinate, wear masks, and socially distance. But the fact remains, we remain mired in two national emergencies – a public health emergency and an economic emergency.
There is a bit of good news to report on the CTC expansion front. While advocates continue to fight for passage of CTC expansion, families can still claim the full 2021 Child Tax Credit by filing a return this tax season, which begins on January 24 (this year, the filing deadline falls on April 18). Families that received monthly payments from July through December 2021 can claim the remaining half of the credit on their tax returns. Families that did not receive monthly payments can now claim the full amount, up to $3,600 per child.
If you know of a family or families that can benefit from the CTC expansion when tax filing begins later this month, please encourage them to sign up at this web site to be alerted when free tax services (including in-person, virtual, and do-it-yourself options) are available. And when families prepare to file their taxes, they can find a list of what they need here. One key note: even individuals who do not typically file taxes or do not have recent income will need to file this year in order to claim the full 2021 Child Tax Credit, and potentially other benefits.
Meanwhile, advocates are pressing on to demand that the Senate continue the CTC expansion. They are sharing personal stories about how parents and children have benefitted from the CTC expansion, as well as the hardships they will experience if the credit is not extended. If you want to contact your Senator, please call 1-888-738-3058. We’ve also created this helpful toolkit to assist you with your advocacy.