Biden administration steps up push for improved child tax credit for low-income families

Originally posted: MAY 11 22 09:02 ET

By Tami Luhby, CNN

(CNN) — Low-income parents now have another chance to get the enhancement of the 2021 child tax credit without filing a full tax return.

The Biden administration is relaunching its efforts to reach families whose income is so low that they do not have to file a tax return and direct them to an online portal where they can submit the necessary information to apply for the credit. Eligible households can receive up to $3,600 for each child under age 6 and up to $3,000 for each child ages 6 to 17.

The portal, created by the nonprofit Code for America in collaboration with the White House and the Treasury Department, reopens on Wednesday. The free tool, available at ChildTaxCredit.gov or GetCTC.orgis accessible on desktop and mobile devices and is in English and Spanish.

The online tool was launched last fall but was unavailable during tax return season, to encourage people to file complete returns, which would allow them to claim other tax credits.

More than 115,000 families used the portal to claim approximately $440 million in tax benefits last fall. Approximately 25,000 households applied for the child tax credit and the remainder applied coronavirus stimulation checks they hadn’t received, said David Newville, senior director of Code for America’s tax benefits program.

Parents who received half the credit in monthly installments last year can use the tool to claim the remaining amount. Those who missed monthly payments can file a claim full credit by submitting simplified declarations on the portal, which should be available until the end of this year.

Enhanced credit

the $1.9 trillion US bailout, which President Joe Biden signed into law in March 2021, made several significant changes to the existing child tax credit for the past year. He increased the amount of the credit, which was $2,000 for each child up to age 17, and sent half of it to parents in monthly installments for the first time.

Also essential to fight poverty: the assistance program made the tax credit fully refundable, so that more low-income parents could take advantage of it. It had only been partially repayable – leaving more than 26 million children unable to get the full amount until 2021 because their families’ incomes were too low, according to the Treasury Department.

Most parents didn’t have to do anything to get the monthly infusions, since the Internal Revenue Service already had their 2020 or 2019 statements showing they had claimed the credit. More than 36 million households, with more than 61 million children, have received the monthly payments.

It’s unclear exactly how many children are in families that had to act to get the child tax credit – estimates range from 3 to 5 million children.

However, the bonus was only in effect for one year. Biden and most Democratic lawmakers had hoped to extend the enhanced credit for at least a year and pour additional funds into outreach and assistance as part of their $1.9 trillion. Building Back Better Expenditure Program. The Senate, however, failed to pass the legislation last year after Democratic Senator Joe Manchin of West Virginia refused to support him.

The expanded credit has helped reduce child poverty — an achievement that Biden and congressional Democrats have repeatedly touted.

Some 3.7 million children were lifted out of poverty in December, when the last monthly payments have been distributed, according to estimates from the Center on Poverty and Social Policy at Columbia University. The credit has led to an estimated nearly 30% reduction in child poverty and has helped families pay for food and other necessities.

More awareness

Although the administration, Code for America and community organizations across the country have been trying to raise awareness of the credit since last spring, many of these very low-income families have remained reluctant to file 2021 tax returns or use the online portals that Code for America and the IRS operated last year.

This year, the effort will focus on working with federal, state and local agencies to reach the low-income Americans they serve — hoping to convince parents that this is not a scam and that they won’t get in trouble or lose benefits if they provide information to the IRS.

Text messages, emails and letters from these agencies have already prompted some families to apply for the credit.

“We’ve been very focused — with encouragement from many groups and Code — to further drive state and local government awareness. That’s where people go to seek benefits and are trusted messengers,” said Gene Sperling, the White House official responsible for managing coronavirus relief efforts, told CNN.

For example, the Social Security Administration plans to send credit-related emails to the 27 million Americans who have signed up for Social Security accounts, Sperling said. The Biden administration is working with the Department of the Interior on outreach to tribal nations and with the Department of Housing and Urban Development on partnering with local housing authorities.

Code for America works with state, county and local agencies that administer benefits such as food stamps. It proved successful in the 10 weeks its portal was open last year.

“What we found is that if you send two to four of these messages, you’re likely to drive a ton of traffic to the site,” Newville said. “This year, we are doubling down on that outreach mechanism.”

It will also launch a friends and family referral option, hoping more parents will be interested if they see people they know receiving the tax credit.

However, simply alerting people to improved credit has not proven to be enough to get them to apply in many cases. Outreach efforts by the federal government and Code for America will also direct very low-income Americans to the portal so they know where to submit their simplified tax returns.

The majority of users take 10 to 15 minutes to file their information, and the site offers a chat connection to trained staff members who can help those who run into trouble, Newville said.

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