Mother and father cheer the primary of six baby tax credit score prepayments
lisegagne | E + | Getty Images
Barbarett Corbbins was relieved to see an additional $ 500 deposited in her bank account last week.
She had received letters from the IRS stating that she was entitled to child tax deductions for her two children, ages 10 and 17, but had forgotten when the money was due. When she finally checked her balance in the second week of July, she found, on the advice of a friend, that she was getting $ 250 per child.
“I was like ‘Amen,'” said Corbinns, who lives in Wheeling, West Virginia with her children. She has been on medical leave since December from her job as a registration specialist at West Virginia University Hospital and is unsure when she will be able to return. She will be paid $ 500 each month through the end of the year.
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“I’m not working so it will definitely help me keep caring for my children and have the extra income I need to pay our bills and everything.” Her monthly utility bill alone is about $ 370, she said, so she looks forward to having the extra cash to help with such expenses.
Anything left over will be used for savings, said Corbbins, which she was able to top up over the past year and a half through the stimulus checks sent to her family.
More than 35 million families with 60 million children received the first child tax credit from the federal government last week. According to the US Treasury Department and the IRS, around $ 15 billion has been transferred. The average payment was $ 423, which means some families got more and some got less.
The payments come from the improved child tax credit, which is part of the US bailout plan signed by President Joe Biden in March. The law increased the existing child tax credit from $ 2,000 to $ 3,000 and added a bonus of $ 600 for children under 6 years of age for the 2021 tax year.
Half of the loan is paid out to families in monthly installments from July to December – for families receiving the full loan, it is $ 300 per month for children under 6 and $ 250 per month for children 6-17.
What is really needed now is a lot of outreach and education for jobs, communities, and low-income families.
Director of the Poverty to Prosperity program at the Center for American Progress
While the loan goes to around 90% of children, it is most helpful for low-income households who may be struggling to save or who have been hard hit by the coronavirus pandemic. Studies show that it can cut child poverty rates in half.
“It came on time,” said Lafleur Duncan, 53, of Brooklyn, New York, who used the first payment to buy new clothes for her 13-year-old son. The future money will also help the family pay the rent after both Duncan and her husband lost their jobs during the pandemic.
About 86% of those who received the first payment did so via a direct deposit, according to the IRS. The rest, like Marla Snead, 52, who lives in Chesapeake, West Virginia with her 14-year-old daughter Carlee Turner, received paper checks. As soon as the check arrived, she and her daughter ordered new school clothes online.
Marla Snead (right) with daughters Kelsie Dillard (left) and Carlee Turner.
Snead was thrilled to get the check, she said, and the money will be of great help for the next several months.
“It was a sigh of relief,” said Snead.
The program was not without its problems, however. Laurynn Vaughn, 37, is eligible for payments for her 4 and 5 year old daughters and should have received them.
But the money is still not there, said Vaughn, who runs a daycare center in Kissimmee, Florida and is also a notary and litigation supervisor. When she inquired on the IRS online portal, it said it was pending but did not provide any further information on the reasons; Vaughn filed her taxes on time for 2020 and 2019 and is within the income bracket, she said.
“I’m waiting to see what happens, but I try not to think about it or think about it because, you know, if I’d been in a situation where I needed it badly [the money], it would have been a problem, “said Vaughn.
Laurynn Vaughn does not expect the child tax breaks that should be paid to her two daughters aged 4 and 5. When the money comes she says she’ll save most of it.
Source: Laurynn Vaughn
Even if she may not be able to get the prepayments, she should still be able to claim the full credit when she files her taxes for 2021 next year.
How to ensure payment
If you didn’t receive your first payment and you think you qualify, there is still time to make sure you get the money in the months ahead. Those who traditionally do not file tax returns and have not used the online IRS non-filer tool to request stimulus checks can register using the agency’s registration facility.
Even if you sign up too late, the IRS will give you full upfront credit by December, according to the IRS. It will just come in larger monthly payments to make up for what you have missed.
Families can also update their information, such as: B. Where to send payments or opt out of receiving them to get full credit when they file taxes for 2021 next year. According to the IRS, there will also be a way for people to reimburse payments they may have received in error.
“The success of this program will really be in the execution,” said Arohi Pathak, policy director of the Center for American Progress’ Poverty to Prosperity program. “What is really needed now is a lot of outreach and a lot of education for communities and low-income families, especially those who don’t pay taxes.”
One problem with the IRS is that those in need of the money most urgently are the hardest to reach, including those who don’t file taxes because they don’t have sufficient income and still need to apply for multiple stimulus checks to which they are due to get.
Democratic lawmakers are pushing to make the loan permanent. Biden has suggested adding at least a few more years so that it doesn’t stop abruptly in 2022.
“We hope this lasts,” said Joanna Ain, associate director of policy at Prosperity Now, a financial literacy nonprofit. “A lot of groups are working really hard to make this permanent.”
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