Dad and mom are eagerly awaiting the beginning of the kid low cost
Marla Snead (right) with daughters Kelsie Dillard (left) and Carlee Turner.
In a few weeks, millions of families will receive monthly payments from the federal government through the new, expanded child tax credit.
For Marla Snead, 52, money means the world.
Snead and their youngest daughter Carlee, 14, live in Chesapeake, West Virginia – their oldest, Kelsie, is 22 and away. If she has an extra $ 250 pillow each month, she can occasionally take Carlee to a movie and buy her supplies and clothing for next year high school. She is also considering buying air conditioners for her home, something that she has been without.
“Two hundred and fifty dollars is like giving a million to a poor man,” said Snead, who is cancer-fighting and lives on social security benefits. “It will help me a lot.
“I mean, even for Christmas – maybe I can give Christmas to my kids.”
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This is how credit works
The expanded child tax credit is part of the US rescue plan that President Joe Biden signed in March. For the 2021 tax year, the existing $ 2,000 child credit will be increased to $ 3,000 for dependents under 17 and an additional $ 600 for children under 6.
Half of the loan will be paid to American families in monthly prepayments from July 15 through December. For children 6-17 years old, the full credit is $ 250 per month. For children under 6, the full credit is $ 300 per month.
Full credit is available to all eligible children in families with 2020 or 2019 Adjusted Gross Income less than $ 75,000 for a single parent and $ 150,000 for a co-submitting couple. Full extended credit ends for individuals earning $ 95,000 and married couples filing $ 170,000 together, although they are still eligible for the regular child tax credit, which means they will receive lower monthly payments starting in July.
When families file their 2021 tax return next year, they’ll get the remaining half of the credit in their usual refund or offset other taxes if they owe the IRS.
Approximately 39 million families, or 88% of American households with children, will receive the loan, according to the IRS. The money will lift more than 4 million children out of poverty and reduce the remaining number of children 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 bring food to the table and a roof over people’s heads,” said Radha Seshgari, director of public order and system change at SaverLife, a national not-for-profit organization. “Without the money, some people live on the edge of a knife in some households.”
The benefit of extra money every month
Seshgari also noted that receiving monthly prepayments as opposed to a lump sum on tax returns will be particularly helpful for some families over the next year.
Lafleur Duncan, 53, of Brooklyn, New York, will use the money to buy new clothes for her 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 will help the family pay the rent for their apartment in the Bushwick neighborhood.
Lafleur Duncan and her family. Your son’s child tax reduction helps with rent, school supplies, clothing and medical expenses.
Her family decided to get the monthly prepayments instead of opting for a larger lump sum next year because they need the help now. Lafleur lost her nanny job last year when the family she worked for decided to leave New York because of the pandemic. Her husband, a cook, cut his working hours because of Covid.
“Right now I have to catch up for myself,” she said.
Others say they will use the money to help them catch up too. 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 over certain bills such as property taxes the house she and her husband own in Rockford, Illinois.
“It’s kind of moving forward,” she said. “But I mean, you will be of great help.”
Margaret McGaw-Sullivan’s daughters (left to right): Mairead Mulrooney, 16, Gretchen Campbell, 10, and Jubilee Campbell, 8 months.
While some parents are cautious about receiving monthly payments prior to arrival. Laurynn Vaughn, 37, was due to receive payments for her two daughters, ages 4 and 5.
But she won’t rely on it until she sees the money in her account, she said.
“If I budget with money I haven’t seen, I can get myself in bad shape and I can’t afford to be in a bad place right now,” said Vaughn, daycare, notary and litigation server in Kissimmeeme, Florida. When the money comes, she’ll try to save most of it, she said.
In the future, some lawmakers and researchers are pushing for the improved tax credit to continue. President Biden suggested extending the loan to 2025 while other Democrats want it to be permanent.
A particularly important part of the extended loan is that it is fully refundable so that people without an income can take advantage of it. This ensures that the loan goes to the lowest income families who were excluded from the previous loan because only part of it could be repaid.
“This is the difference between a family who eats, doesn’t pay rent, or doesn’t sleep on someone’s couch,” said Danielle Goonan, executive director of the US Equity and Economic Opportunities Initiative at the Rockefeller Foundation.
She added that repaying the loan in full will lift millions of children out of poverty. “The harmful effects of child poverty are a massive cost to American society and the wider economy,” she said.
As it stands, the extended credit – including the extra money, eligibility and prepayments – is only valid for the 2021 tax year. That is, in January 2022, the monthly payments will suddenly stop.
If that happens, Kakena Jones, 40, 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 took part-time work at Lowe because her job at a group home in Nicholls, Georgia, was insufficient to cover childcare.
However, the child allowance replaces the money she brings in on her second job. But if the payments end in December, she’ll likely have to have two jobs again, she said.
“I just want to be home with my kids again,” she said.
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