Thrane: Child tax credits will help, but some choose to wait
Opening my mail a few days ago, I noticed a letter from the White House signed by President Joe Biden explaining the US bailout that was adopted on March 11.
This plan aims to help millions of American families fight the public health and economic challenges caused by the pandemic.
Along with the April stimulus checks, this plan includes an expanded Child Tax Credit (CTC). This refundable tax credit is not a new concept, but an expanded version of what many families are already familiar with.
Instead, think of it as a cash advance from your tax credit.
For each child aged 6 to 17, the credit is $ 3,000. For each child under 6, it’s $ 3,600. Monthly payments of $ 250 or $ 300 started arriving on Thursday and continue through December 15, although people can opt out and receive the credit when they file their 2021 taxes.
I was wondering if families are planning to take advantage of it and, if they are, how they plan to use it – you don’t have to do anything to receive the payments.
I asked some people and got a wide range of responses.
Karla Rangel of Des Moines, who has two children, Hunter, 15, and Henry, 13, told me that she refuses to receive the monthly payments from the CTC.
“Unless you are really behind on bills or rent, or have lost income due to COVID-19, this is a very short-term solution because when you do your taxes for 2021, they will be deducted, ”she said.
This isn’t quite the complete picture – receiving payments now doesn’t mean you have to pay them back next year, unless your income level changes dramatically upward between last year and this year. taxation. You might not get such a big tax return next year since, even though the usual child tax credit has been increased, with the advance payments, but overall families are still receiving more.
David Quiñones of Des Moines said he was worried about wider inflation and rising prices. Some examples he mentioned were insurance for his car and his mortgage, his mortgage and his gasoline.
While one of the main uses of the tax credit may be paying for child care expenses, a daycare owner friend of mine didn’t really know about it.
To my surprise, not everyone was on the same wavelength when it comes to understanding or using the expanded child tax credit, but some things are clear: the deployment could have used a better marketing and some families will certainly benefit.
The pandemic has put families in health and financial danger, so any help will definitely be helpful, something Luz Paredes from Des Moines shared with me. Paredes has a 3 year old daughter and is counting on that $ 300 per month.
“I accepted the child tax credit because it will help me,” she says. “Due to COVID and health issues, and a car accident, I have fallen behind on my bills.”
by Claudia Thrane
Posted on 07/15/21