Child Tax Credit: Why Many Parents Don’t Realize They Can Still Claim Money
With one week to go to file your 2021 tax return, you need to make sure you have exhausted all opportunities to save money and claim available credit where you can. When it comes to providing for your children, every dollar counts. For parents, one way to make sure you aren’t missing out is by taking a closer look at the child tax credit (CTC) to see if you are claiming all entitlements.
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In 2021, the American Rescue Plan Act (ARP) expanded the CTC significantly for one year, making it the largest U.S. child tax credit ever — and providing many working families with $3,000 per child under 18 years of age and $3,600 per child six and younger.
The ARP also made the credit fully refundable and provided tax credit options for families to take half the credit in six monthly payments. As of July 15, 2021, 39 million households, providing for 88% of children in the United States, automatically began receiving payments of between $250 and $300 if they had chosen to.
Not only is the CTC fully refundable but, because only half of the child tax credit was paid out in advance, a portion of it might still be available to many families this year. However, it turns out that some parents do not know that they are entitled to this additional money afforded via the CTC when filing their 2021 taxes.
The Bipartisan Policy Center and Morning Consult conducted a survey of 1,500 parents from Feb. 17 through 22, 2022, “to measure awareness of and familiarity with the CTC, understand reactions to temporary changes to the credit for 2021, and identify areas for improving its administration to increase accessibility.”
While the poll found that 63% of parents who qualified for the CTC in 2021 said that the credit had a large impact on their family’s finances, 34% of parents were not aware that they may be eligible to receive more money from the CTC when they file on April 18.
For the 2021 tax year, minimum earnings requirements were waived under the enhanced child tax credit, making the credit available to a greater number of recipients. However, 28% of respondents said those changes were not well-communicated, which could mean that many of the most deserving families will miss out on much-needed funds.
See: IRS Warns of Potentially Outdated Information on Child Tax Credit Portal, Mailed CTC Letters
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Whether President Biden can extend the enhanced CTC for 2022 depends on the voting outcome of the Build Back Better bill, should it be resurrected.
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This article originally appeared on GOBankingRates.com: Child Tax Credit: Why Many Parents Don’t Realize They Can Still Claim Money
