There is still time for families to collect their $ 1,800 child tax credit before the cash bonus ends.
Americans are expected to get the last round of child tax credit payments of this year on December 15, 2021.
The Internal Revenue Service has been sending child tax credit payments to millions of families since July, but their fate is uncertain by 2022.
If President Joe Biden’s $ 1.75 trillion Build Back Better program is approved, CTC credits would be extended for one year.
To be eligible, families must earn less than $ 150,000.
Single parents who identify themselves as heads of household must earn less than $ 112,500.
Typically, eligible families receive up to $ 300 per child per month.
But CTC payments received in 2021 could affect your taxes in 2022, if you received an overpayment and the IRS has not adjusted the amount of subsequent payments.
If you received payments, you were not eligible for the money will need to be refunded.
Read our live blog on the Child Tax Credit below for the latest news and updates …
Payments reduced food shortage in marginalized groups
The Bureau also found that child tax credit payments were more helpful to specific groups.
“The effects on food insufficiency are concentrated in families with pre-tax incomes in 2019 of less than $ 35,000, and the CTC greatly reduces food insufficiency in low-income Black, Latino and White families,” he said. revealed the study.
Increasing CTC Coverage “Would Help Reduce Hardship”
The National Bureau of Economic Research, which concluded that “it would be necessary to increase the coverage rate of the CTC to further reduce material hardship.”
“The self-reports suggest that lower-income households were less likely than higher-income families to receive the first payments from the CTC,” the document added.
“As more children receive the allowance in the coming months, the material hardship may decrease further. “
“Even with imperfect coverage, our results suggest that the first CTC payments were largely effective in reducing food insufficiency in low-income families with children.”
Some people might see a bigger check in December
People who did not file a tax return in 2020 or 2019 and did not claim their child tax credit through the online tool for non-filers could get a larger payment up to to $ 1,800 in one lump sum, reported AL.com.
The payment would equate to six months of credits and would come in December, with the remainder coming whenever 2022 taxes are filed, according to the outlet.
How many payments are left this year?
There is only one child tax credit payment left this year.
The last payment will be sent on December 15, 2021.
The most recent payment was sent on November 15, 2021.
What sacrifices have families made to pay for child care costs?
According to Care.com, 94% of parents have had to make at least one major sacrifice in the past year:
- 42% of parents reduced their working hours
- 26% of parents have changed jobs
- 26% of parents have completely left the labor market
Do parents think the current CTC is sufficient?
According to the Cost of Care survey, 25% of parents said the current plan provided sufficient support.
56% said the plan should go further by helping provide support to families with child care.
79 percent of respondents said they supported increasing child tax credit payments.
What child care rate is considered affordable?
A child care rate of no more than 7 percent of a family’s household income is considered affordable, according to the US Department of Health and Human Services (HHS).
Currently, most families reported spending 10% or more of their family income on child care expenses.
How much does child care cost?
According to the 2021 Cost of Child Care Survey, most families struggle to pay for child care.
85% of the families surveyed declared that they spend at least 10% of their family income on childcare costs.
More than half (57%) of families surveyed spent more than $ 10,000 on child care in 2020.
59% of families are on track to spend more than $ 10,000 on child care in 2021.
How to Avoid CTC Scams
To protect yourself, the Better Business Bureau recommends doing your research to make sure the check is real and whether the government agency or organization issuing the payment actually exists.
And don’t forget that you can check the status of your stimulus payment and your eligibility directly with the IRS.
Why did some families get larger payments in November?
Those who started claiming child tax credits late got more than others for the month of November.
Assuming this was their first month of claiming, they received up to $ 900 for each child.
Those with two children under six received $ 1,800. Those with two children aged six to 17 received $ 1,500.
Those who started claiming last month received up to $ 600 per child.
Why did some families receive lower payments in November?
Some might give smaller payments because they received a little more than they should have in a previous payment.
In September, a problem arose: Families overpaid $ 31.25 per child between the ages of six and 17 and $ 37.50 per child under six.
This affected around 2% of beneficiaries, or around 700,000 families.
“Some of these cases” will now receive slightly lower payments for October, November and December to accommodate the overpayment, the IRS said.
This will result in a reduction of about $ 10 to $ 13 per child in monthly payments for October, November, and December.
So if this affects you, your family has received a little less for this month and will be for December as well.
Bernie Sanders calls Republicans “pathetic” about CTC
Senator Bernie Sanders took to Twitter to defend the expanded child tax credit, calling its impact a “great achievement.”
“By expanding the child tax credit, we have helped millions of families and reduced child poverty by 45%,” he wrote.
“Yet not a Republican will vote to extend this program. Pathetic.”
Family and Medical Leave Act – continued
And more importantly, while skilled Americans have guaranteed time off, they don’t get paid. This is problematic because the majority of Americans live paycheck to paycheck.
Compare that to other countries like Estonia, which offers new mothers up to 18 full months of paid leave.
Your employer may offer paid time off, but this is not common. In fact, only 19 percent of American workers have access to paid family leave through their employers.
The law on family and medical leave explained
Under the Family and Medical Leave Act (FMLA) of 1993, eligible employees can take up to 12 weeks of job-protected leave each year.
But there are some limits to the law.
Not all employees are eligible for the FMLA. According to the Department of Labor, only 56% of employees are eligible for the FMLA.
What is the American bailout?
On March 11, 2021, Biden enacted the US bailout.
The $ 1.9 trillion economic stimulus bill aims to provide relief to the country in response to the COVID-19 pandemic.
According to the bill, “the US bailout will change the course of the pandemic and bring immediate relief to American workers.
“The plan will build a bridge to a fair economic recovery and
reduce child poverty, ”he said.
Biden’s emergency legislative package aims to fund vaccinations, bring immediate and direct relief to families suffering from the pandemic, and support struggling communities.
Ways to spend child tax credits
A great way to take advantage of child tax credit payments is to use them to meet your debt load.
Large debts can often prevent you from taking additional loans or making other financial decisions.
Plus, it can impact your credit score.
Some people who have accumulated thousands of dollars in debt could get significant relief from child tax credit payments.
If you don’t have any savings or emergency funds yet, child tax credits might be a good time to rack that up.
The downside to saving in a traditional savings account is that it won’t experience significant growth.
Put your CTC money in a savings account
However, if you put your money in a high yield savings account, you will earn more interest.
Concretely, a high yield account can earn 20 to 25 times more interest rate than a traditional savings account.
Finally, if your financial situation is stable without the tax credit payments, it might be wise to invest it for the future.
Assuming you are saving for your child’s school fees or for something that will positively impact them in the future, you can try investing in a fund so that it can potentially grow right down the line.
But keep in mind that, as with any investment, you are never guaranteed to make a profit. In fact, the value of your assets can even go down if you’re not careful.
But choosing an index fund is not a bad way to start, as these are considered safer bets compared to individual stocks.