Child Tax Credit Expansion3 min read
A Republican senator in Missouri recently proposed a bill to restore the Child tax credit. It would have created a new refundable tax credit that would have given single parents with children under the age of thirteen up to $6,000 in cash payments each year. For married couples, the larger benefit would have been a “marriage bonus.” It would have been $500 for single parents, but it would be $1,200 for married couples. This proposal did not pass the Senate.
Eligibility requirements for the Child Tax Credit are quite strict. A taxpayer must be a U.S. citizen or national and be claiming the credit with respect to children or stepchildren. Other family members may also qualify as long as they meet the dependency requirements. Adopted children may qualify. However, it is not always possible to claim the credit on behalf of adopted children. Therefore, taxpayers should check carefully when applying for the credit. By following these simple steps, they can claim the credit for the child they are responsible for raising.
Moreover, a full Child Tax Credit expansion would generate an additional $1.08 of economic activity for every dollar of tax money spent on the program. This means that more children would be lifted out of poverty. If the Child Tax Credit were fully available to all low-income families, the child poverty rate would decrease by almost one-third. Even more, an increased Child Tax Credit could save children from starving. Therefore, it is necessary for the government to increase the Child Tax Credit for low-income families.
Advance payments of the Child Tax Credit are available for those who have filed their 2019 taxes and have children. If you did not file taxes in 2019, you can still claim your Child Tax Credit in the year 2020. However, you must file your tax return by November 15, 2022 in order to receive your advance payments. The IRS will need your updated bank account information to approve your advance payments. So, take care of your bank account details so you can claim the full Child Tax Credit.
If you earn less than the threshold required to qualify for the full child tax credit, you may qualify for a smaller portion of the tax credit. The child tax credit is a significant part of the government’s overall budget, so consider your eligibility carefully before claiming this benefit. If you qualify, you can claim up to $2,000 per child. However, you must have an income of $24,000 or higher to claim the full amount. For those who earn less, however, it is important to calculate your total income and determine your child’s Social Security number.
The CTC is meant to help families that have trouble meeting these expenses. It used to be that only parents could claim the full credit. But this system has many flaws, and millions of families haven’t been able to claim it because of low income. The new American Rescue Plan will extend the CTC for one year and will be signed into law on March 11, 2021. As a result, it will benefit approximately 23 million children – many of them are Black or Latinx.