The penultimate expanded child tax credit monthly payment is going out today.
Worth up to $350 per child per month under six and $300 for older kids, the payments have helped parents afford essentials like food, clothing, shelter, and utilities along with education and paying off debt. In total, $15 billion will reach about 36 million families today, but both numbers fall well short of where they should be. That’s because today is also a massive deadline for the 13 percent of eligible parents who are not receiving (and haven’t opted out of) the monthly payments.
The parents who fall into this category are those who didn’t file taxes last year because they didn’t make enough income to owe federal income taxes. In other words, they’re so poor that they don’t legally have to file tax returns.
Before the credit was expanded there often wasn’t a reason for them to do so, but when Congress made the credit fully refundable, these poorest parents suddenly became eligible to receive it. Unfortunately, without a record of their income, the IRS has not sent them the money they’re owed.
The easiest way for these folks to get that money ASAP is to file a simplified tax return with GetCTC.org. Today is the final day that eligible parents who have yet to file a tax return can do so in order to receive half of their credit before next year’s filing period.
Low-income parents who file taxes by today can get the entirety of the monthly payment amounts (half of the total credit) as part of the December payment. Otherwise, they’ll have to wait until tax filing time in early 2022 to receive the full amount. That’s several more months during which the most vulnerable American parents would go without the thousands of dollars the federal government owes them.
And if this kind of failure of implementation that only hurts the poorest American families wasn’t depressing enough, today’s payment is a bittersweet moment for the parents who’ve become accustomed to the monthly assistance.
That’s because the American Rescue Plan only made the child tax credit more generous and fully refundable for one year. Renewal seems like the obvious choice, but opposition to the much-improved child tax credit from all Republicans and some conservative Democrats in the Senate means that eligible parents are guaranteed just one more monthly payment, on December 15.
The Biden administration has made an effort to extend the credit, but it also urged the House to pass the bipartisan infrastructure bill without the Build Back Better Act that contains the CTC extension. Abandoning the plan to pass both bills together, using them as leverage for each other, means that it’s unclear what leverage the White House has to motivate Democratic holdouts to support the extension.
So even if the Build Back Better Act passes, it could very well contain a degraded child tax credit extension that is less generous and/or available to fewer families thanks to stricter income limits. Or, it could do away with the extension altogether.
The good news for parents is that they are due to receive the second half of the credit at tax time next year. But that’s a long time from now, and it means that the first months of 2022 will undeniably be more difficult financially for American families as they continue to struggle to weather a pandemic that hit decades into a historical era largely defined by bipartisan policies that have favored the rich and harmed the poor.