President Biden’s expansion could help lift 137,000 North Carolina children out of poverty, officials hope.
President Biden’s expansion of the child tax credit means a lot more money in the pockets of North Carolina families.
There’s no catch – and in most cases, no additional action is required to get the money. If you’ve paid taxes in the last two years, you are automatically enrolled.
Families were forced to make hard choices during the pandemic. Between employment and income instability, health worries, disappearing child care, and remote education, many parents were forced between a rock and a hard place.
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Biden’s American Rescue Plan increases the annual tax credit from $2,000 per child to $3,000 per child aged 6-17 and $3,600 for kids under 6 years old. Advance payments, estimated on the amount claimed on the latest tax filing, should begin going out Thursday, July 15 and continue in monthly installments through the end of 2021.
Because the credit is fully refundable, even families with little to no income are eligible for the credit. Before the American Rescue Plan was passed in March, 27 million children were ineligible to receive full credit because their families’ incomes were too low.
Asked what she would do with the extra money, Briana Mendonza, a divorced mother of two in Kannapolis, said she would use it toward childcare, after school programs, and summer camps.
Gaston County mother Jenny Wunderlich simply replied, “Bills. Always bills.”
The credit could also defray childcare costs, helping mothers return to the workforce who had opted out in order to care for their young children. These parents, especially women of color, were hit hardest by unemployment at the height of the pandemic. The monies are poised to lift some 137,000 North Carolina children out of poverty.
“This legislation is critically important for our constituents,” Congressman G.K. Butterfield of Durham said on a call late last week. “It will cut child poverty almost in half.”
Democratic legislators are fighting to pass The American Families Plan, which would extend the tax credit expansion through 2025.
“In my district alone, 184,000 children will benefit from the tax credit and 13,000 will be lifted out of poverty,” said Rep. Deborah Ross, of Raleigh. “Resources and childcare are essential for poor families and with this credit, families can finally make decisions based on the best interests of their children, not just on finances.”
The Internal Revenue Service provides an outreach toolkit to help people access the credit. Recipients are not required to be documented citizens, just taxpayers with an I10 or tax identification number. The child being claimed must have a Social Security Number.
If a parent ends up earning more income than anticipated, they should report the increase in income at the Child Tax Credit portal on IRS.gov so the monthly payments can be adjusted. The income limit is $200,000 for a single parent of a child aged 6-17, or 400,000 if a joint income. A calculator on the IRS site can estimate payments.
The checks will be deposited or sent out via snail mail, depending on the most updated information. People who have not filed in recent years are being urged to do so.
“These payments are waiting for you,” Butterfield said. “Go get it. Please take advantage of this.”