On Monday, September 27th, CWLA hosted a Child Tax Credit (CTC) webinar that was sponsored by the Coalition on Human Needs (CHN). In the webinar Debbie Weinstein, the executive director of the Coalition of Human Needs, explored the benefits, logistics, challenges, and eligibility for the Child Tax Credit.
In March 2021, The American Rescue Plan Act expanded the CTC for the tax year of 2021. The expansion of the CTC added new provisions, increasing assistance for families. Firstly, instead of receiving a tax credit of $2,000 for one child and $4,000 for two or more children, families with children ages 0-5 now receive a tax credit of $3,600 per child while families with children ages 6-17 receive $3,000 per child. Additionally, there is no longer an income minimum for families to receive the tax credit. Now, families with no income can access the CTC though its refundability provisions. Lastly, families can choose to get monthly installments of the CTC rather than a lump sum when they file taxes in 2022.
As a result of the expanded CTC of 2021, child poverty decreased by 10 million as the CTC accomplishes both long-term and short-term spending goals for families. For the short term, the Census Bureau’s Household Pulse Survey reported that families spent the CTC on food, clothing, rent, utilities, and school related items. Moreover, the Brookings Institute reported long term funds such as starting or growing college funds, investing in emergency savings, and funding activities for their children.
The 2021 CTC still operates under some restrictions on eligibility that would not exist under the current reconciliation proposals. The 2021 CTC has restrictions on relationships, citizenship, and living situation. To qualify, children must be the ages 0-17 (an increase from age 16), as well as possess a United States citizenship. If the child meets these requirements, the guardian must have access to their Social Security Number (SSN); the child also must have access to SSN. To receive the CTC, the taxpayer must submit evidence of relationship to the child. This includes but is not limited to foster parent, biological parent, and kinship caregivers. The last eligibility requirement is a specified living situation.
The taxpayer must have lived with the qualified person for a least 6 months plus one day. During the webinar, CWLA explored the challenges that foster parents face in terms of the eligibility standards. State by state, there is a different protocol for finding the SSN for the child in foster care. While some states, such as New York offer accessible forms, other states have no specified protocol. Due to this issue, CWLA created a spreadsheet that documents each state’s procedures on how to obtain a child’s SSN. Another challenge is the ability to change your status since last year’s tax filing. The IRS has promised to have an online portal to allow you to add (or subtract) a child. This is important for family that adopted or have cared for a foster child this year but not last. That portal is yet to be posted by the IRS.
Under this year’s CTC guidelines of eligibility, families within the lowest margins of income often struggle with the initial steps of the application process. Part of the strategy behind the webinar was to help educate agencies that are in contact with these families.
Although further research is in process, first reports indicate that many families that reside within low-income households did not file taxes for the 2019-2020 year. As a result, families are unable to receive benefits provided by the CTC or any supplementary stimulus package distributed within the past year unless they take some additional steps. For families that can file taxes, receiving CTC benefits is still not a guarantee. Complicated family relationships like separated parents, foster parents, mixed guardianships, and other caregivers that provide services face difficulties when attempting to receive benefits. The proposed extensions of the CTC for the future will attempt to fix these shortfalls.
CWLA and the Coalition of Human Needs have devoted resources, databases, and guides in an effort to support families that are in need of the first step towards receiving these much-needed benefits. With an easy-to-use interface, any person can access the nonflier portal from any mobile device to easily file either a simplified return or a full tax return. Thus, direct service providers are encouraged to take advantage of these resources in all efforts of outreach. By doing so, the distribution of this crucial information is ultimately the key to ensuring that each family has adequate support of financial security to provide proper care for their children.
Resources:
State by state information on obtaining a child’s SSN CWLA SSN Spreadsheet
Coalition on Human Needs How to Help Families Apply for the Child Tax Credit and Other Payments
CTC website: https://www.getctc.org/en
Get CTC demo: https://www.youtube.com/watch?v=nGoyN_M9SfQ
