Americans are now receiving the concrete effects of the American Rescue Plan show up in their bank accounts, as the expanded child tax credit goes into effect for one year.
This blog post is written especially for those families that need to let the IRS know they exist and qualify for this benefit. Here is the IRS link to sing-up.
Through this program, the Child Tax Credit increased to $3,000 per child aged 6 to 17 and $3,600 per child under 6. All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent.
The government sent payments for almost 60 million children yesterday, totaling $15 billion.
In America, one in seven children lives in poverty. This measure is expected to cut that poverty nearly in half. Studies suggest that addressing childhood poverty continues to pay off over time, as it, for example, helps adults achieve higher levels of mobility.
The United States provides big tax incentives to encourage people to work, to buy a home, to save for retirement. But the government provides less money than almost every other developed nation to help people raise children. Last year, the tax credit for buying an electric car was almost four times as large as the tax credit for having a child.
Another challenge is reaching the very people who most need the help.
Sending money to middle-class families is easy. Their addresses and often their bank account information are on file with the Internal Revenue Service. The government estimates that 86 percent of recipients are getting the payments by direct deposit.
But the administration estimates more than four million children live in households that are eligible but aren’t on the I.R.S. mailing list. In the early 2000s, the government mounted a successful campaign to increase the use of food stamps by allowing states, which administer the programs, to make it easier to apply and qualify for them. Participation rose to 85 percent of eligible households in 2016, from just 54 percent in 2002.
There is a difference between celebrating a program as an attack on child poverty and ensuring it helps as many poor children as possible. We write today’s blog post to help our community achieve both outcomes.