A new website
from University of Michigan Poverty Solutions offers step-by-step assistance for parents to get the expanded federal Child Tax Credit, which is worth up to $3,600 per child per year.
The American Rescue Plan Act
of 2021 increased the Child Tax Credit from $2,500 per child to $3,600 per year for children under 6 years old and $3,000 per year for children 6-17 years old. For instance, a parent with a 4-year-old and a 7-year-old would be eligible for a $6,600 credit.
“The Child Tax Credit is a historic opportunity to reduce child poverty in Michigan, which is a staggering 19%,” says Afton Branche-Wilson, assistant director of community initiatives at Poverty Solutions. “... In practical terms, this means more low-income families will be able to make rent, invest in after-school programs, or pay down debts. When families get an income boost, kids do better in school and earn more in lifetime earnings."
The expanded Child Tax Credit will be paid out monthly rather than annually, with payments from the IRS of $250-$300 per child expected to start in July. In addition, the tax credit does not count as additional income that could affect eligibility for public assistance.
To receive the credit, parents or guardians still need to file taxes for 2020, the deadline for which has been extended to May 17, 2021. Parents of children under 18 may be eligible to receive the credit even if they have not previously filed taxes and have low or no earnings.
“The expanded Child Tax Credit provides significant support for families and promises to lift millions of children out of poverty,” Branche-Wilson says. ” We see the Child Tax Credit as a way of reducing child poverty, and we are encouraging everyone to use it to assist with medical expenses and other expenses as needed.”
There has been significant research
on the potential for a child allowance to reduce child poverty rates in the U.S. A recent fact sheet
from Columbia University finds that the expanded Child Tax Credit will reduce child poverty by 45% overall, by 52% among Black children, by 62% among Native American children, and effectively eliminate the most extreme forms of child poverty.
The expansion of the Child Tax Credit is temporary for one year. During that time the credit's effect on families’ experience of material hardship will be analyzed to inform debates about permanently offering this benefit.
Additional information from Poverty Solutions on the credit is available here:
The Child Tax Credit: What You Need to Know
The Child Tax Credit: What You Need to Know factsheet
(also in Arabic
Listening to SNAP Participants to Improve Access to the Expanded Child Tax Credit
Monica Hickson is a freelance writer currently based in Ypsilanti.
Photo courtesy of Afton Branche-Wilson.