The IRS has announced that many parents are now entitled to new child tax credit payments. News of the benefit increase came as a pleasant surprise to families across the country after years of not qualifying for child tax credit. The child tax extension began in July and has helped low-income families file and qualify for the tax credit.
The extra money will help families cover the cost of school supplies and clothes for their children, in addition to other expenses. Amongst other things, the new changes have brought relief to struggling families, especially after the economic struggles of the pandemic.
What’s New About the Child Tax Credit Payments?
People below the income level for tax returns have been struggling to care for their children. With this expansion, the IRS hopes to help low-income families across the country by including them in the child tax credit. This is part of a larger effort by President Biden and the Democratic party to fight child poverty.
Before this year, households with children under the age of 17 who filed for tax returns and child tax credit received $2,000 per child. This new extension will reach new families and it will allow parents to collect half of their credit for the remainder of the year. For older children between 6 and 17, parents can receive up to $250 a month per child, and for children 6 or younger, they can receive up to $300 per child each month.
Amid the pandemic, the American Rescue Plan increased the amount of child tax credits and extended the benefits to those with lower incomes throughout 2021. Lower-income families could not have access to child tax credits as they were only partially refundable, but now that they are fully refundable, at least through this year, they can reap the benefits.
How Do I Collect It?
The federal government will send out payments to households who qualify in monthly installments to distribute the money this year. The program will automatically include those who submitted and claimed child tax returns for the previous year. Thirty-six million notices have already been sent to qualifying families in the U.S.
Unfortunately, the IRS will not automatically include those who haven’t submitted their tax returns or received stimulus checks. Those within this category need to submit the proper documentation to ensure they receive the new benefits.
Since these changes are new, it is also essential for families and friends to spread the news. It can be an intimidating process, but the extended credit is intended to help those in need, and it can’t do so without educating them first. As put by family lawyer Charles D. Jamieson, “it has been a challenging year. Parents need to understand the various resources put in place to support their children.”
How Will This Help?
So far, there has been difficulty reaching those who had not filed for tax returns or stimulus checks. Since those are the systems in place for the IRS to process the tax credit, they are pushing for more Americans to file to distribute the aid. Spreading the news will be challenging since many U.S. cities have a large population of unaccounted children.
After a long, hard year, community efforts are essential for those in need of financial support to get the assistance they need.
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