Child Tax Credit Expansion Could Benefit NC Low-Income And Immigrant Families
About 4 million low-income children nationwide could miss out on monthly Child Tax Credit payments, according to a study from the Center on Budget and Policy Priorities.
As part of the American Rescue Plan, the Child Tax Credit program has been expanded for 2021. Beginning on July 15, eligible families started receiving monthly payments of around $250 to $300 per child.
The expansion raised the total Child Tax Credit from $2,000 per child to $3,000 for children between 6 and 17, and from $2,000 to $3,600 for children under 6. In addition to the increase in funds, families will receive half of the money in advance through monthly payments until December and will be paid the other half after filing their 2021 tax return.
According to the Center on Budget and Policy Priorities these changes are estimated to reduce the number of children in poverty by more than 40%.
The nonprofit organization NC Child reports the expansion could lift more than 140,000 North Carolina children out of poverty, particularly children of color. However, the Center on Budget and Policy Priorities study says many families could miss out on getting these funds. Namely families with the lowest incomes.
Eligibility for the Child Tax Credits is broad. All families can get the full amount if they make up to $150,000 for a couple, $112, 500 for heads of household and $75,000 for single filers.
If families filed tax returns in 2019 or 2020, or if they signed up to receive stimulus checks they’re automatically signed up to get the payments. However, Hector Campuzano, a paralegal at the Charlotte Center for Legal Advocacy, says not everyone who is eligible for the Child Tax Credits fits into these categories.
“Sometimes families don't have a filing requirement just because they make too little or they don't work at all, or the head of household doesn't work at all,” Campuzano said. “But there's ways to be able to go ahead and apply or to sign up to receive the payment if they want to receive it now.”
To receive the Child Tax Credit, families that did not file a tax return can go to the IRS website to sign-up.
The Charlotte Center for Legal Advocacy has a Low-Income Taxpayer Clinic and Campuzano says they’ve been receiving a lot of calls.
“A lot of questions that we've had are mostly just figuring out if they're eligible or not. And also managing the website,” Campuzano said.
He says the Center for Legal Advocacy can help answer eligibility questions but can’t assist with filling out information. The IRS has translated all Child Tax Credit information on its website in Spanish and six other languages. And the Charlotte Center for Legal Advocacy wrote a blog post providing answers to their most asked questions.
Both the Charlotte Center for Legal Advocacy and the IRS are warning families to watch out for scams. Campuzano says the IRS will not reach out to people via phone or email.
“A lot of scammers say, ‘Oh, we'll help you apply for the tax credit,’" Campuzano said. "The IRS will never call with those types of questions. They won't text, email or call regarding helping people file for this.”
Families who prefer to receive the Child Tax Credit funds at once can opt out of the advanced monthly payments on the IRS website. Campuzano says this is a good idea for families who might no longer qualify for the credits when they file their 2021 tax return.
“It's really important that if the child is going to age out or if their income situation changes, they can go online and make those changes as necessary,” Campuzano said. “Because if they end up making more money than they did the year before, then their credit could change. So, therefore, they may end up having to owe money next year by receiving this money.”
Some immigrant families are also eligible to receive these credits. All children with Social Security numbers qualify for a Child Tax Credit. Immigrant parents can use their Individual Taxpayer Identification Number to sign up if they have not previously filed taxes. These identification numbers can be obtained through the IRS website.
According to the research organization New American Economy, immigrants in North Carolina who are in the country illegally paid more than $720 million in federal, state and local taxes in 2019.
While mixed-status families can be eligible for the Child Tax Credit, the Washington Post recently reported that some families who filed taxes using an identification number did not receive their July 15 payments. According to the newspaper, the IRS acknowledged the complaints and said it was working to correct the issue.
Receiving a Child Tax Credit will not affect a person’s immigration status, according to The Center for Law and Social Policy.