For millions of parents throughout the country, the New Year has begun without a monthly deposit from the child tax credit increase, a deposit of several hundred dollars that parents had counted on since the expansion’s implementation in July.
Tierra Hal, a single mother of two girls aged 4 and 2, said of the $600 monthly payment she has received since July, “That was the only money I was getting for the last six months.” “I used it to cover my car payment and other expenses.”
Hal, 25, of Ranson, West Virginia, said she has a hard to finding work because there aren’t enough child care options for her two girls, a problem exacerbated by the coronavirus outbreak.
“It’s difficult for a single mom to find work in general, let alone with COVID,” she explained. “Finding someone to keep my kids while I work is difficult.”
Lara Lawson, a single mother of a 9-year-old daughter in Milton, West Virginia, said she is concerned about her family’s future without the monthly child tax credit payment.
“I’m worried about just making ends meet without that little push every month,” she admitted. “The grocery bill will remain unchanged. Things aren’t going to start getting cheaper any time soon.”
Lawson works full-time at the United Way of the River Cities as the director of the community impact, where she encounters a lot of families that rely on child tax credit payments for support.
“It’s difficult to perceive all of the amazing things that came from it right now,” Lawson said, “but when it goes away, it’ll become evident.” “I’m hoping [lawmakers] connect it to the real-life consequences of people who were able to pay their bills more easily before, and now we’re going to suffer.”
“I feel like we’ve been forgotten in terms of any economic assistance during this pandemic,” she remarked.
According to the Internal Revenue Service, Larson and Hal are just two of the nearly 35 million families in the United States that have received the expanded tax credit of up to $300 for each child under the age of five and up to $250 for each child aged six to seventeen.
According to the Census Bureau, the money was mostly spent on children’s education and child care fees, as well as necessities like food, rent, mortgage, and utilities.
According to the West Virginia Center on Budget and Policy, a nonpartisan policy research organization, the expiration of the child tax credit increase has put 50,000 children in West Virginia at risk of falling into poverty.
The fate of extending the child tax credit increase in 2022 is in the hands of the United States Senate, which has yet to vote on the Build Back Better Act, which was passed by the House of Representatives in November and includes a one-year extension of the monthly payments.
According to Erica York, an economist with the Tax Foundation’s Center for Federal Tax Policy, without the expansion, the child tax credit will revert to its previous levels, which are a maximum credit of $2,000 per child under the age of 17 that phases in with earned income for lower-income households and is largely received at a tax-filing time rather than in monthly payments from the IRS.
What parents should know about getting the last of their child tax credit money
Parents who chose not to receive monthly payments will receive the entire amount of the child tax credit when they file their federal tax return in 2021.
Parents who received monthly child tax credit payments in the previous year will receive the remaining half of their funds when they file their taxes.
According to York, the IRS has sent out letters informing parents of the amount of advance monthly payments they got and the number of qualified children the IRS used to calculate their monthly payments.
“You should wait to file your taxes until you receive this letter from the IRS,” she advised, “since you’ll need that information to file your taxes.” “And if you’re a married pair, you’ll receive one letter for each spouse, so keep an eye out for two letters.”
When parents receive the letter, York advises them to compare the IRS total with their own records of advanced child tax credit payments to ensure the figures are correct.
Parents can also monitor their payments through the IRS’s child tax credit updating service.
“There are protections based on income levels if someone received too much-advanced money, more than they qualified for,” York said. “So, if someone earns less than a specific income level, they are generally protected from having to repay, but if they are a higher-income household, they may have to reimburse if they received an overpayment.”
According to York, if a person gives birth in 2021 and qualifies for the child tax credit but does not get advance payments, they can report the child on their tax return and receive the amount in their refund.
She also mentioned that low-income families who do not regularly file taxes will be required to do so this year in order to get the remainder of the child tax credit payment.
York suggests that parents file their taxes electronically and submit bank information so that their returns can be issued by direct deposit in order to receive their refund as soon as possible.
She also advises parents to double-check that the information they provide is correct and corresponds to what the IRS has on file, as inaccuracies will create delays.
“And if what the IRS has on file does not match what a person believes they received, they should contact a tax preparer for assistance on what to proceed,” York added, noting that the IRS also has a Frequently Asked Questions page on its website to assist.