The expanded Child Tax Credit became effective on March 11, 2021, after President Joe Biden signed into law the American Rescue Plan Act. It provided historic tax relief to the vast majority of families as the CTC stimulus check reached homes well in advance through monthly payments between July and December 2021.
Thanks to the Rescue Plan, the vast majority of families received $3,000 per child between the age of 6 and 17 years and $3,600 per child below 6 years. Households received 50% of the total amount in 6 equal checks, though many families preferred to collect it as a single amount against the 2021 income tax returns filed in 2022.
The CTC stimulus check helped support American families. It ensured food was on the table. Families could now easily afford the costs of raising children or even saving for their children’s future.
Multiple pieces of research revealed that the CTC payments helped people with the most necessities, including food, other essentials, and rent. Parents were able to meet the costs of education, pay off their debts, and save for their education.
For a majority of low and moderate-income families reeling under sustained unemployment, the Child Tax Credit stimulus check reduced food insufficiency. It proved vital as the federal stimulus check payments had ended, and the extended unemployment checks came to an end in the first week of September.
Important Information About The Child Tax Credit Stimulus Check
The ARPA ensured a significant increase in the amount families with children received under the CTC. A family received between $3,000 and $3,600 per child depending on their age, a significant expansion from the earlier fixed amount of $2,000. The upper age limit was also raised from 16 years to 17 years. All eligible families received the full credit if they jointly made up to $150,000 in 2021 or $112,500 for a family with a single parent.
One of the most significant changes from the earlier version of the child tax credit was that the ARPA ensured that tens of millions of families for the first time received the payment almost a year in advance. The amount was worth up to half of their estimated full annual credit amount. They received the remaining after filing their 2021 returns in 2022.
The full amount of the CTC stimulus check was not taxable. The amount received under the CTC did not have any impact on anyone’s eligibility for federal benefits. Those families who did not receive the monthly CTC stimulus checks in 2021 received their full amount after filing their 2021 income tax returns this year.
Other than parents, even legal guardians of children including grandparents, are eligible for the Child Tax Credit payments.
The Significant Advantages In A Child’s Future Far Outweighs Any Negatives
The child tax credit markedly reduced the number of children with family incomes below the poverty line. It also narrowed the gap in poverty rates between white children and Black and Latino children. The significant benefits of the proposal far outweigh any potential reduction in employment.
Multiple kinds of research have revealed that poverty and the accompanying hardships that children are subjected to shortchange their futures. Unstable housing and food insecurity affect both the children and their parents, with the latter forgoing meals in many households to provide for their children. Economic security programs directly targeting children significantly reduce poverty and improve their long-term health and educational results.
Such support boosts the chances of their success in life and benefits the nation as a whole. Children with unstable homes are the most vulnerable group and a significant number of them take to crime to shake off poverty, getting tied down in even greater trouble.
The child tax credit payments were made available to 27 million children. It included approximately half of all Black and Latino children whose families earlier did not get the full credit because their parents did not earn enough.
The proposal succeeded in lifting close to 10 million children out of poverty including 2.3 million Black children, 4.1 million Latinos, and close to half a million Asian American children. It also succeeded in lifting over a million children out of deep poverty and raising their family earning close to 50% above the poverty.
These families were the hardest hit by the pandemic and the resultant economic, health, and educational impairment.
The Role Played By The Child Tax Credit In Improving Health
The CTC stimulus checks provided substantial benefits for children and their families to improve their health. Research had proven the relationship between low income and low levels of health among children.
Children growing up in poverty for extended periods experience adverse health consequences that range from delays in early childhood development to depression and chronic health problems that persist in later life.
This relationship between childhood poverty and health extends across the range of income. People belonging to the lowest rung of income are most likely to report poor health, followed by people in middle-income families.
The conversion of the CTC stimulus checks into a fully refundable payment meant that even families with incomes too low to owe federal income tax received the maximum credit amount. Thus, for the first time, the payments reached families who deserved them the most.
IRS Failed To Send CTC Payments To Millions
The delivery of the monthly installment of the Stimulus Check payments to eligible families led to a marked decrease in food insecurity. But audit has revealed that some of the poorest did not receive payment and the numbers are significant. Around 98%, or 175 million households, received their payments but $3.7 billion remains unpaid to 4.1 million households.
Those who missed out on all or part of the CTC payments can still file and claim their money. Families who have failed to get their stimulus checks still have until November 15, 2022, to file for the funds. The simplified tool, GetCTC.org was created to simplify the process, especially for low-income families not used to the intricacies of filing taxes. This tool was developed by Code for America, a non-profit, in collaboration with the US Treasury Department and the White House.
