Exciting changes to the Child Tax Credit go into effect July 15. The changes are part of the American Rescue Plan Act and include higher credits and expanded eligibility. Eligible families will now receive tax credits up to $3,600 per year for children under age 5 and $3,000 per year for older children, up to age 17. This is a substantial increase from the previous $2,000 credit. Also new this year is how and when money will be distributed. For the first time, half of the total credit will be paid out monthly - up to $300 per child - with the remainder being claimed on next year's tax return. This means money in pockets when families need it, no waiting until the middle of next year and no strings attached. The first of these monthly payments is scheduled to roll out July 15. A tax credit calculator can help estimate how much money families can expect this year.
A welcome change will make previously ineligible families eligible for these credits. For example, families with incomes below the filing minimum for yearly tax returns are no longer left out. The new stimulus credit changes allows non-filing families to claim their credit. These checks won't just appear, however. Families have to sign up with the IRS to provide information to determine eligibility, which creates a simplified tax return. This information will also allow these families to claim their third Economic Impact Payment as well as the Recovery Rebate Credit if they did not receive the first or second stimulus in full.
Hundreds, possibly thousands, of Adirondack families may be eligible for the tax credit under the new guidelines. While the IRS is co-hosting sign-up events in major metropolitan areas, in the North Country outreach and assistance is falling to community nonprofits to educate people about the changes, encourage them to register, and help them navigate the process and any barriers they may face. The IRS has information about eligibility and payments as well as resources, toolkits, and other guidance for community partners and eligible families alike.
This historic investment is long overdue and the Adirondack Birth to Three Alliance is advocating for long-range policy solutions that prioritize children and families.
