PARENTS and guardians could see an extra sort of stimulus in 2022 thanks to the Child Tax Credit.
If Democrats manage to extend the program throughout 2022 as part of President Joe Biden’s Build Back Better agenda, that would mean $600 credits for twelve more months — totaling $7,200.
Some legislators want to extend the benefit for just one more year. Previously, the Biden Administration proposed extending the enhanced credit through 2025, and some lawmakers would even like to see it become permanent, CNBC reported.
Meanwhile, the Child Tax Credit schedule has caused confusion for some parents who are missing their October payment.
For October, most families were slated to get up to $300 in child tax credits per child. You should check with the IRS to be sure your banking and address information is correct and up to date if you haven’t received your October payment.
As for November payments, the opt-out deadline is November 1 — just days away.
Read our child tax credit live blog for the latest news and updates…
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WHAT IS THE ELIGIBLITY ASSISTANT?
The advance child tax credit eligibility assistant is the easiest way to check if you qualify for the payments.
To use it, you need to have filed your tax return for 2020 or 2019.
The IRS states: “If you don’t have a copy of the return and know your filing status and number of qualifying children you claimed, you may be able to estimate the total income from your tax return to answer all the questions. You can use the following to make estimates:
- Income statements such as W-2s and 1099s
- Amount of any expenses or adjustments to your income
You may still be able to benefit from the credit even if you aren’t working now or didn’t work in 2020.”
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WONDER WEBSITE
The GetCTC.org tool has recently launched and it’s a mobile-friendly portal to help families claim.
Rolled out in collaboration with the White House, the US Treasury and Code for America, a nonprofit tech organization, it’s designed to ensure eligible families can easily claim the child tax credit cash they’re due.
It’s free to use, works on both desktops and mobile devices and is available in both English and Spanish.
Families are required to file a simplified tax return to get the money.
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EASY ACCESS PORTAL
The IRS has created an easy access portal aimed at Americans who don’t have enough to file a tax return.
Those who are eligible can use the new tool to update relevant information, including names, addresses, and Social Security numbers.
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CAN UNDOCUMENTED IMMIGRANTS RECEIVE THE CTC?
Previously families with mixed-migration status were shut out of the program, but undocumented parents with children who are US citizens can now apply for this benefit.
While the child tax credit was expanded this year to include families with no income and undocumented parents with children who have Social Security numbers, the IRS said an “issue” caused families with parents who have an Individual Taxpayer Identification Number (ITIN) to not receive the first July payment.
Those families were supposed to get both the July and August payments by now.
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HOW TO CHECK YOUR PAYMENT STATUS
The IRS has an online portal that Americans can use to check the status of their checks.
This tool allows you to view your payments and to check if you’re enrolled for advanced payments.
You need an IRS username and an ID.me account to check payments online.
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‘SURPRISE STIMULUS’
The new adjustments to the Child and Dependent Care Credit for 2021 mean that working American families who hit certain requirements will pocket thousands in extra stimulus funds.
It covers childcare costs up to $8,000, as well as costs for looking after a spouse or parent who can not care for themselves.
This increases to $16,000 in expenses for families with two or more dependents.
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GROUP SUGGESTS INCREASING CTC COVERAGE WOULD HELP REDUCE HARDSHIP
Finally, the NBER found, “increasing the CTC coverage rate would be required in order for material hardship to be reduced further.”
“Self-reports suggest the lowest-income households were less likely than higher-income families to receive the first CTC payments,” the paper added.
“As more children receive the benefit in future months, material hardship may decline further.”
“Even with imperfect coverage, however, our findings suggest that the first CTC payments were largely effective at reducing food insufficiency among low-income families with children.”
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PAYMENTS REDUCED FOOD INSUFFICIENCY IN MARGINALIZED GROUPS
The Bureau also found that child tax credit payments helped certain specific groups more strongly.
“The effects on food insufficiency are concentrated among families with 2019 pre-tax incomes below $35,000, and the CTC strongly reduces food insufficiency among low-income Black, Latino, and White families alike,” the study found.
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CTC PAYMENTS ‘STRONGLY REDUCED FOOD INSUFFICIENCY’
The National Bureau of Economic Research released a paper on the impacts of the child tax credit payments and revealed startling findings.
First, the child tax credit payments “strongly reduced food insufficiency: the initial payments led to a 7.5 percentage point (25 percent) decline in food insufficiency among low-income households with children,” according to the study.
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FAMILIES WHO DID NOT FILE TAXES CAN STILL BENEFIT
The GetCTC.org tool is for those households who haven’t filed tax returns for 2019 and 2020.
You typically didn’t have to file a tax return if you earned less than $12,200 as a single taxpayer in the 2020 tax year or $24,400 as a married couple filing jointly.
Under the tool, you’ll need your Social Security number or an individual taxpayer ID number.
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CHILD TAX CREDITS PAYMENTS RUN THROUGH DECEMBER
There have already been four child tax credit payments issued this year.
There are two payments left: one in November, and the last one, which arrives in December.
For those wondering why their child tax credit payments – which started in July – have not been processed at all, there are a number of factors, such as the IRS not having knowledge of one’s qualification, due to a family not filing a tax return in 2019 or 2020.
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WHEN IS THE AGE CUT OFF DATE FOR DETERMINING CTC AMOUNTS?
“Age is determined on December 31, 2021. If your child turns 18 this year, then they are not eligible for the monthly Child Tax Credit,” explained Congressman Steve Cohen.
“However, the American Rescue Plan did provide for a one-time credit of $500 for dependent children aged 18 and for dependent full-time college students aged between 19 and 24.”
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SOME CREDITS GO UNCLAIMED
A recent survey by IPSOS showed that for those who have never claimed the credit around one in five believed that they were ineligible, Forbes reports.
Child tax credits are automatically given out to families who’ve filed a tax return, while non-filers need to register via an IRS tool.
The non-filer tool was set to remain open until October 15, according to the IRS.
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EXPERTS WARN TO RETURN WRONG PAYMENTS
Experts have warned that families who are mistakenly receiving the advanced child tax payments for a dependent who turns 18 before the end of the year should opt-out of future payments.
If they don’t, they may be required to pay back all the money once they file taxes.
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TOOL TO TRACK PAYMENTS
There is an online portal that Americans can use to check the status of their checks.
This tool allows you to view your payments and check and see if you’re enrolled for advanced payments.
You need an IRS username and an ID.me account to check payments online.
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CHILD TAX CREDIT COULD BE EXTENDED, PART TWO
Currently, the Democrats control the Senate and the House by slim margins.
Senate Democrats are reportedly considering a three-year extension of the maximum $3,600 per child credit.An aide said to be familiar with ongoing discussions told Business Insider that the extension could be included in the $3.5trillion budget plan.
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CHILD TAX CREDIT COULD BE EXTENDED
President Biden previously called to extend the child tax credit payments until at least 2025 – but he can’t do it alone.
An updated measure would need to get through Congress before it reaches Biden’s desk.
Last time around, not a single Republican lawmaker voted for the $1.9 trillion rescue package.
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WHY HAVEN’T I RECEIVED MY CHECK?
If the IRS does not have your correct income information from your 2020 tax return, and is instead using information from your 2019 tax returns to determine eligibility, there might be a delay.
If your income information changed in 2020 or you had a child, the IRS will automatically adjust your payments once your 2020 tax return is processed.
If you did not file taxes, there’s a tool called the Child Tax Credit Non-filer Sign-up Tool where you can add your information to see if you qualify
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WHY WOULD I OPT OUT OF THE CHILD TAX CREDIT PAYMENTS?
Opting out essentially means you are postponing when you receive the remaining portion of the credit until next spring, reports CNET.
It is a good solution for divorced or single parents who have joint custody or claim dependents differently on their 2020 and 2021 tax returns.
Others might prefer to opt-out to avoid potentially having to pay the IRS money back, or would just prefer a bigger tax refund next year.
For example, you should opt-out if you prefer to receive one large payment next year instead of seven smaller ones.
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FAMILIES WHO DID NOT FILE TAXES CAN STILL BENEFIT
The GetCTC.org tool is for those households who haven’t filed tax returns for 2019 and 2020.
You typically didn’t have to file a tax return if you earned less than $12,200 as a single taxpayer in the 2020 tax year or $24,400 as a married couple filing jointly.
Under the tool, you’ll need your Social Security number or an individual taxpayer ID number.
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HERE’S HOW CHILD TAX CREDIT PAYMENTS CURRENTLY WORK
Qualifying American families will receive up to $300 per child per month until this upcoming December.
Considering the payments started in July, that would mean millions of American families would get $1,800 by the end of 2021.
The remaining half of the payments will be able to be claimed on your 2022 tax return. In total American families are set to get up to $3,600 per child.
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WHO QUALIFIES?
Single parents or parents who file their taxes as single will qualify for the full checks if they make $75,000 or less.
If you make more than $75,000, the monthly check is reduced by $50 for every $1,000 over the cap and eventually phases out completely.
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VP HARRIS SAYS CHILD TAX CREDIT IS ‘WORKING’
Vice President Kamala Harris wrote about the success of the child tax credit on Twitter on Monday.
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HOW LONG DOES BIDEN WANT TO EXTEND THE CHILD TAX CREDITS?
President Biden has called to extend the child tax credit payments until at least 2025.
But he would need help from Congress to make it happen.
Senate Democrats are reportedly considering a three-year extension of the maximum $3,600 per child credit, which could be included in a $3.5trillion spending package.
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CHILD TAX CREDITS BEGAN IN JULY, WILL RUN THROUGH DECEMBER
There have already been four child tax credit payments issued this year.
There are two payments left: one in November, and the last one, which arrives in December.
For those wondering why their child tax credit payments – which started in July – have not been processed at all, there are a number of factors, such as the IRS not having knowledge of one’s qualification, due to a family not filing a tax return in 2019 or 2020.
