The Deadline To File For The Expanded Child Tax Credit Is Rapidly Approaching
Here's what you need to know.
The deadline is near for families to file taxes in time to receive additional financial benefits for their children under an expanded child tax credit. And there’s a special hitch this year — tax filing services are being offered for free by the federal government. But only if you do so by Monday.
The IRS has provided a guide of options for how to file taxes for free in addition to offering free tax preparation through its Volunteer Income Tax Assistance and the Tax Counseling for the Elderly programs. Seventy percent of Americans are eligible for the expanded child tax credit, according to the IRS.
If taxes are filed on time, child tax credit checks will begin being sent out in June, USA Today reported. That would put it one month ahead of its original scheduled first proposed in January. The legislation provides $3,600 per child under the age of six and $3,000 for children ages six through 17. Monthly payments of up to $300 would be allocated over the course of 12 months.
The assistance is expected to play an outsized role in Black and brown households, which have been disproportionately affected by the coronavirus and subsequent economic fallout from the pandemic.
The American Rescue Plan Act also has the potential of reducing child poverty. Included as a part of Biden’s recovery plan announced in January, experts from Columbia University found that expanding the tax credit along with other proposed measures would reduce child poverty by more than 51%.
Like the stimulus payments, the IRS would issue monthly checks based on the child’s age and the filer’s income. This would provide families with immediate relief instead of having to wait to file taxes. Single parents earning up to $75,000 and couples earning up to $150,000 would be eligible for the full amount. Child tax payments would be available to families for a year.
While some have pointed to the potential bipartisan appeal of the proposal, the differences are deeper than a seeming consensus on increasing the child tax credit. For instance, Sen. Mitt Romney proposed a measure that appeared similar to the Democrat proposal.
The Romney proposal would have provided $4,200 for children under five. But it would have eliminated other assistance relied upon by families including the child and dependent care tax credit, the “head of household” tax filing status, and the block grant for the Temporary Assistance for Needy Families (TANF) program.
Currently, the child tax credit gives families a credit up to $2,000 per child under age 17. In cases where the credit is more than the amount owed, families have their refund capped at up to $1,400 per child.
Statistics show that the pandemic has hurt Black and brown communities more than others, making the need for financial assistance exponentially pressing for them. Not only are Black people are dying from the coronavirus at nearly three times the amount as white people but Black unemployment remains the highest of any group.