The expanded child tax credit is over — at least for now
Millions of families who had been getting hundreds of dollars a month in extended child tax credit payments since July won’t be getting that money this month after the program expired earlier than many advocates had hoped.
An extension of the Child Tax Credit is part of President Biden’s Build Back Better legislation that’s currently stalled in the U.S. Senate. West Virginia Sen. Joe Manchin, in particular, has reportedly objected to the expanded child tax credit program.
Payments were $300 monthly for each child under age six, and $250 monthly for kids ages 6-17.
“It's just been a really big, big boost to families,” said Alena Anderson, community impact manager, moving to financial stability at United Way of Southwestern Pennsylvania. “It's cut into the poverty level for children experiencing poverty. It's really been beneficial to families across the spectrum.” Many families used the credit on basics such as childcare, food, and clothing, she said.
“It's given people that did not have breathing room breathing room for the first time,” she said.
Families can still receive one final, lump sum payment when they file their taxes, Anderson said, and encouraged anyone who was receiving the payments – or who has children and is eligible but wasn’t receiving monthly payments – to make sure to file a 2021 tax return.
The tax credit had existed previously, but it expanded greatly under the American Rescue Plan last March, and for the first time, payments were made to families monthly, rather than in one payment at tax time.
Receiving the funds monthly was key, advocates say.
“A lot of families were really starting to rely on getting those monthly payments,” said Kristie Weiland Stagno, free tax prep coalition coordinator for the nonprofit Just Harvest. “[It] made a big difference in being able to budget month to month to get the payments in advance, rather than waiting for a big payment on their tax return.”
The program had been touted as having the potential to cut child poverty in half in the United States. Vice President Kamala Harris promoted the credit in a visit last year to Pittsburgh on what the White House dubbed ‘Child Tax Credit Awareness Day.’ Critics had said it was in danger of not reaching the families who needed it most – those whose income was too low to regularly file income tax returns, families with limited English proficiency, no internet access, or other barriers. Locally at least, some advocates were working to reach out to those families and make sure everyone who qualified for the credit would receive it.
“Hopefully Congress will kind of come to some agreement or make some kind of arrangements that it'll be extended and made permanent so that, you know, families won't have to struggle,” Anderson said.
For more information about getting your taxes prepared for free call United Way at 2-1-1 or visit https://pa211sw.org/.