Many Parents Still Don’t Know They Could Have Stimulus Funds Coming Their Way
- The Child Tax Credit was paid partially in 2021, but some families may still be entitled to funds.
- Recent data reveals that many parents don't know they could be eligible for more money, which can be claimed on a 2021 tax return.
With the deadline to claim that money looming, that's not a great thing.
When the Child Tax Credit got a boost for the 2021 tax year, it served as a lifeline for many families. Not only did the maximum value of the credit increase, but the credit changed to become fully refundable. That meant any taxpayer could claim it in full, regardless of their tax liability.
The Child Tax Credit was also made available to families earlier than usual. Normally, the credit is claimed as a lump sum on a tax return. Last year, half of the credit was paid in monthly installments that hit bank accounts from July through December.
But because only half of the Child Tax Credit was paid out in advance, many families may still be eligible for a portion of it this year. And to get that money, they'll need to claim the credit on their 2021 tax returns, which are due on April 18.
But new data reveals that many families aren't aware they may be in line for more money under the Child Tax Credit. And that means many could wind up missing out on a giant windfall.
Don't pass that money up
In a recent poll by the Bipartisan Policy Center and Morning Consult, 34% of parents were not aware they may be eligible for more money from the Child Tax Credit this tax season. And that's money a lot of families can't afford to pass up.
These days, living costs are soaring due to inflation. Consumers are spending more money on everything from gas to groceries to utility bills. And to lose out on additional Child Tax Credit funds could mean running into a pile of debt.
What's even more disturbing is that those who are more likely to miss out on Child Tax Credit funds are those who might need that money the most -- namely, those who became eligible for the credit due to changes put into place last year. Formerly, the Child Tax Credit was subject to minimum earnings requirements. Those were waived for the 2021 tax year, making the credit available to a greater number of recipients. But in the aforementioned poll, 28% of respondents said those changes were not well-communicated.
That's why it's so important to file a tax return this year. Anyone eligible for Child Tax Credit funds can claim that money by submitting a return, but those who don't take that step could end up forfeiting thousands of dollars.
Will the Child Tax Credit get a similar boost for 2022?
President Biden was originally hoping to keep the enhanced Child Tax Credit in place for 2022. But so far, lawmakers have yet to vote on legislation that would make that happen. As such, the monthly payments recipients enjoyed between July and December 2021 have not arrived this year.
If the Child Tax Credit does not get a boost, its maximum value will revert to $2,000 per eligible child, down from $3,600 in 2021 for children under age 6 and $3,000 for children aged 6 to 17.
At a time when living costs are soaring, that's not ideal. But at this point, it's iffy as to whether lawmakers will manage to find a way to increase the value of the credit for the current tax year.
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