Child Tax Credit
What is the Child Tax Credit?
The Child Tax Credit in the American Rescue Plan provides the largest Child Tax Credit ever and historic relief to the most working families ever – and as of July 15th, most families are automatically receiving monthly payments of $250 or $300 per child without having to take any action. The Child Tax Credit will help all families succeed.
How it works
As part of the federal American Rescue Plan’s expansion of the Child Tax Credit, on July 15, 2021 the first monthly payment of the expanded credit went out to families. Eligible families received a payment of up to $250 per child ages 6 to 17 and $300 per child under age 6. According to the Center on Budget and Policy Priorities, 94,000 children and youth under age 18 in the District of Columbia – over three quarters (76%) of all DC children and youth - stand to benefit from the expanded child tax credit, including 8,000 who could be lifted above the poverty line by the expansion.
Why it matters
That’s important because the pandemic has had a serious impact on families’ economic security, especially for families of color. Putting more money in families’ hands can help them meet their basic needs. In the first month after payments began, the most common uses families reported were paying bills (51%), buying clothing (49%), and purchasing food for their family (47%). Overfall food security increased substantially.
Here in the District of Columbia
Unfortunately, while the payments are designed to be automatic for those who filed taxes in 2019 or 2020, the IRS estimated there are 5,725 children in the District whose families did not need to file taxes in those years so they wouldn’t automatically receive the payments. Over half of those households are in just five zip codes (20002, 20011, 20019, 20020, 20032), making awareness of this option important for children in DC’s highest poverty neighborhoods to benefit. In the first month of payments, only half of eligible families in the District received it. If any eligible family is still not receiving their payments they can use the tool for non-filers to change that. In addition, Mother’s Outreach Network is partnering with volunteer attorneys to hold workshops where families can learn more about the tax credits available to them and ask questions through one-on-one appointments (these started October 19 and 26).
While the expanded child tax credit has been a big help to families, it is only slated to last through 2021. Congress is considering legislation to extend the monthly payments. While they’ve been imperfect at reaching all the families who need support, they’re a huge step in the right direction and we hope that Congress will continue to provide this support for families.