Parents eagerly await the start of child tax credit payments
Marla Snead (right), with her daughters Kelsie Dillard (left) and Carlee Turner.
In just a few weeks, millions of families will begin receiving monthly payments from the federal government through its new, expanded child tax credit.
For Marla Snead, 52, money will mean the world.
Snead and his youngest daughter, Carlee, 14, live in Chesapeake, West Virginia – his eldest, Kelsie, is 22 and out of the house. Having an extra $ 250 pillow each month means she’ll be able to take Carlee to the occasional movie theater and buy her supplies and clothes for high school next year. She is also considering buying air conditioners for their home, which they have gone without.
“Two hundred and fifty dollars to me is like handing a million to a poor man,” said Snead, who battles cancer and lives on Social Security benefits. “It will help me a lot.
“I mean, even Christmas – maybe I could get my kids Christmas.”
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How does credit work
The enhanced child tax credit is part of the US bailout, which President Joe Biden enacted in March. For the 2021 tax year, it increases the existing child tax credit to $ 3,000, from $ 2,000 for dependents aged 17 and under, and grants an additional $ 600 for children. under 6 years old.
Half of the credit will come to American families in the form of advanced monthly payments starting July 15 and continuing through December. For children between the ages of 6 and 17, the full credit will be $ 250 per month. For children under 6, the full credit will be $ 300 per month.
The full credit is available for all eligible children in families whose adjusted gross income in 2020 or 2019 is less than $ 75,000 for lone parents and $ 150,000 for a married couple applying jointly. The full enhanced credit ends for people earning $ 95,000 and married couples jointly filing $ 170,000, although they still qualify for the regular child tax credit, meaning they would get lower monthly payments. from July.
When families file their 2021 tax returns next year, they’ll get the remaining half of the credit in their regular repayment, or it will offset other taxes if they owe the IRS.
Some 39 million families, or 88% of US households with children, will receive the credit, according to the IRS. Money will lift more than 4 million children out of poverty, reduce the remaining number of children living in poverty by more than 40%, according to an analysis by the Center on Budget and Policy Priorities, a left-wing think tank.
“It will literally put food on the table and a roof over people’s heads,” said Radha Seshgari, director of public policy and systems change for SaverLife, a national non-profit organization. “Without money, some people in some households are living on a razor’s edge.”
The benefit of extra money every month
Seshgari also noted that getting the advanced monthly payments, as opposed to a lump sum when filing taxes next year, will specifically help some families.
Lafleur Duncan, 53, of Brooklyn, New York, will use the money to buy new clothes for his 13-year-old son before he starts high school next year. The money will also be used to pay for the prescription inhaler he needs for his asthma and help the family pay the rent on their apartment in the Bushwick area.
Lafleur Duncan and his family. Her son’s child tax credit payments will help pay for rent, school supplies, clothing and medical bills.
Her family have decided that they would like to receive the advance monthly payments instead of going for a larger lump sum next year because they need help now. Lafleur lost her nanny job last year when the family she worked for decided to leave New York City due to the pandemic. Her husband, a chef, has seen his hours cut back due to Covid.
“Right now, for me, I need to catch up,” she said.
Others say they will also use the money to help them catch up. Margaret McGaw-Sullivan, 38, will use the money she receives for her son, who turned 18 this year, and her three daughters, aged 16, 10 and 8 months, to pay some owed bills, such as property taxes. on the house she and her husband own in Rockford, Illinois.
“It’s a bit of moving forward,” she said. “But I mean, they’ll be a big help.”
Daughters of Margaret McGaw-Sullivan (left to right): Mairead Mulrooney, 16, Gretchen Campbell, 10, and Jubilee Campbell, 8 months.
Certainly, some parents hesitate to consider receiving the monthly payments before their arrival. Laurynn Vaughn, 37, is expected to receive payments for her two daughters, aged 4 and 5.
But she won’t count on it until she sees the money in her account, she said.
“If I budget for money that I haven’t seen I can put myself in a bad spot and I can’t afford to be in a bad situation right now,” said Vaughn, daycare provider. , notary and process server in Kissimmee, Florida. If the money arrives, she will try to save most of it, she said.
Going forward, some lawmakers and researchers are pushing for the enhanced tax credit to continue. President Biden has offered to extend the credit until 2025, while other Democrats want to make it permanent.
Part of the extended credit that is particularly important is that it is fully refundable, meaning people can claim it even if they have no earned income. This ensures that the credit will help low-income families, who were excluded from the previous credit because only a portion was repayable.
“It’s the difference between a family that eats, or doesn’t pay rent, or doesn’t sleep on someone’s couch,” said Danielle Goonan, managing director of the U.S. Equities and Opportunities Initiative. of the Rockefeller Foundation.
She added that by making the credit fully repayable, millions of children will be lifted out of poverty. “The harmful effects of child poverty represent a huge cost to American society and to the economy in general,” she said.
As it stands, the subsidized credit – including the extra money, repayment and prepayments – will only apply in tax year 2021. This means that in January 2022, the monthly payments will suddenly stop.
When that happens, 40-year-old Kakena Jones will likely have to go back to work seven days a week. Jones has three children who are still at home with her: a 12-year-old, a 4-year-old and an 8-month-old. During the pandemic, she found a part-time job at Lowe’s because her work at a group home in Nicholls, Georgia was not enough to cover child care.
The child tax credit payments, however, will replace the money she earns from her second job. But, when payments end in December, she will likely have to take over two jobs, she said.
“I just wanna be home with my kids again,” she said.
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