A Survey Shows Some Parents Are Unaware They May Get More Child Tax Credits This Year.

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As the April 18 tax filing deadline approaches, parents who qualified for monthly child tax credit payments last year may also be eligible for more generous lump sum payments when they file their returns.

Congress’s American Rescue Plan temporarily increased the credit limit for 2021.

Beginning in July, millions of parents began receiving monthly checks of $300 for each child under the age of five and $250 for each child between the ages of six and seventeen.

When those parents file their taxes this year, they will receive the remaining half of the child tax credit, totaling $3,600 for children ages 5 and under and $3,000 for children ages 6 through 17.

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However, when asked whether they were aware that they could receive any portion of the credit not received through monthly payments at tax time, 66 percent of parents said yes and 34% said no.

The Bipartisan Policy Center and Morning Consult conducted the poll in February and surveyed 1,509 parents or guardians of children under the age of 18.

 

child tax credit

 

According to Andrew Carothers, research analyst at the Bipartisan Policy Center, the responses to that question were fairly consistent across gender, age, race, and income.

“That’s still a sizable portion of people who may be missing out on money because they’re unaware of what they can claim,” Carothers explained.

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Those most at risk of missing out include those who became newly eligible for the child tax credit as a result of Congress’s temporary changes last year.

Minimum earnings and income phase-in requirements were eliminated as part of the measure. According to the poll, 28% of respondents felt those changes were poorly communicated.

The IRS has worked to increase awareness among individuals who will need to file tax returns in order to receive any available funds.

Individuals who may have missed out on last year’s $1,400 stimulus checks will also need to submit tax returns to claim the funds.

 

The child tax credit has a very strong bipartisan legacy.

The federal government has an opportunity to collaborate with state and local governments and nonprofit organisations to assist people in obtaining resources and assistance necessary to claim the credits, Carothers said.

Notably, the expiration of the monthly child tax credit in December prompted many parents to reduce their spending. Food, according to 35% of survey respondents; clothing, according to 33%; debt repayment, according to 22%; utilities and telecommunications, according to 21%; and transportation, according to 17%.

Around a quarter of parents reported that they made no cuts to their spending in any of the categories surveyed, Carothers said.

However, roughly two-thirds of respondents indicated that the enhanced child tax credit scheduled to take effect in 2021 had a significant or somewhat significant impact on their families’ finances, he said.

Support from across the aisle On September 14, 2021, New Hampshire parents and others gather outside Sen. Maggie Hassan’s Manchester office.

The child tax credit has been restored to $2,000 per child and phased in at 15% of earnings above $2,500 for this year. The maximum refund per child is $1,400.

These terms, which were enacted in 2017 as part of the Republican-led Tax Cuts and Jobs Act, increased the child tax credit’s generosity.

Additionally, Carothers noted that the child tax credit has been expanded with the support of every presidential administration since its enactment.

“The child tax credit has a very strong bipartisan legacy,” Carothers said.

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While lawmakers debate future changes, Carothers believes there may be a way to accomplish this through a bipartisan majority.

“That is truly an avenue for long-term policy change and ensuring the credit remains as successful in the future as it has been in the past,” Carothers said.

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