Nearly Half of Eligible Households in This State Haven't Yet Claimed Their Child Tax Credit

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  • Many families received advance payments for the Child Tax Credit in 2021.
  • In New Jersey, many families are still eligible for the credit, but they'll need to claim it on their 2021 tax returns.

Some tax filers will need to get moving to claim the money they're entitled to.

In the course of the pandemic, many Americans lost their jobs or saw their income take a hit. And for many, 2021 was a recovery year, fueled in part by the boosted Child Tax Credit.

Prior to 2021, the Child Tax Credit maxed out at $2,000 per eligible child. In 2021, its maximum value increased to $3,600 for children under the age of 6 and $3,000 for children aged 6 to 17.

Not only that, but in 2021, the credit became fully refundable, whereas before, it was only partially refundable. That meant someone with a $0 tax liability could still receive the full credit amount they were entitled to.

Finally, in 2021, half of the Child Tax Credit was made available in the form of monthly installment payments that hit bank accounts between July and December. That steady influx of cash helped many families stay afloat at a time when inflation had already begun to drive living costs up.

But some people who are entitled to the Child Tax Credit have yet to claim it. And in one state in particular, it's a large percentage.

New Jersey residents could be missing out

A new report by the Center for Women and Work at Rutgers University’s School of Management and Labor Relations found that 44.4% of New Jersey households did not receive advance Child Tax Credit payments in 2021. And among households earning less than $25,000, 59% in New Jersey did not claim the credit.

That's problematic since the IRS won't send out Child Tax Credit money unless non-filer recipients sign up for it specifically (those with tax returns on file from 2020 got paid automatically in 2021). Last year, there was a non-filer portal available for sign-up purposes. But now, the only way to snag that money is to file a 2021 tax return.

Since lower earners aren't required to file, the fear is that many New Jersey families will miss out on a lucrative credit that could help them make ends meet during these difficult financial times.

Now to be fair, some families in New Jersey may have opted out of the Child Tax Credit's advance payments intentionally to snag a larger refund or avoid a scenario where they'd owe the IRS money. But still, it's clear a lot of New Jersey households would be wise to file their taxes by April 18 -- this year's deadline -- so they can claim the credit they're entitled to.

Tax help is available for those in need

Filing taxes may seem like a daunting prospect for those who have never done it before. The good news, though, is that low-income filers may be eligible for free help through the IRS's Volunteer Income Tax Assistance (VITA) program. Filers earning $58,000 or less are eligible for VITA, as are people with disabilities and those with limited English-speaking abilities.

New Jersey residents in need of tax help can visit the state's Division of Taxation for more information on how to get assistance with a tax return. Getting aid in filing taxes could help ensure that those entitled to the Child Tax Credit get the money they need to stay afloat.

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