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The Washington PostDemocracy Dies in Darkness

The child tax credit is helping parents feed kids and pay for care. But there are only four payments left.

There’s still time to sign up, but an Oct. 15 deadline to register is fast approaching

(iStock; illustration by Chris Barber/The Washington Post )
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I’ve known hunger — and I don’t mean the kind where you open a refrigerator stuffed with food and declare there’s nothing you want to eat. As a small child, I experienced the kind of food insecurity where you’re grateful to share a piece of fruit with two siblings.

We all know that millions of children in the United States don’t have enough to eat. But it doesn’t solve anything to know the problem exists. It’s vital that we find the right answers to reduce the poverty that sends children to bed hungry.

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This summer, one solution came in the form of advance child tax credit payments. The idea was to give families an amount of money each month rather than having them wait for a lump-sum tax refund that could help for a month or two.

Under the American Rescue Plan, the child tax credit was expanded for the 2021 tax year to a total of $3,600 for children 5 and younger and $3,000 for those 6 through 17. Starting in July, parents of children 5 and under began receiving up to $300 a month per child. For parents of children ages 6 through 17, the monthly electronic deposit or check could be up to $250 per child. Overall, the money distributed this year will be half the amount parents are projected to be eligible to claim when they file their 2021 federal returns next year.

Two of these payments have already gone out, and another is set to arrive Sept. 15. The remaining direct-deposit payments are scheduled for Oct. 15, Nov. 15 and Dec. 15.

Each of the first two payments totaled around $15 billion, though the first payment went to about 35 million families, while the second went to about 36 million. The number of families will vary as new people sign up and others opt out.

But clearly, the first batch of advance monthly payments made a huge difference.

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The monthly child poverty rate fell to 11.9 percent in July, down from 15.8 percent in June, according to a briefing paper from the Center on Poverty and Social Policy at Columbia University.

“This drop in child poverty is primarily due to the first payment of the expanded Child Tax Credit, which on its own kept approximately 3 million children from poverty in July,” the center said.

As the rollout continues, the payments are expected to have an even greater impact, especially for Black and Latino children. “It has the potential to reduce monthly child poverty by up to 40 percent on its own; in combination with all COVID-related relief, it could contribute to a 52 percent reduction in monthly child poverty,” the center projected.

The Census Bureau has been tracking how the coronavirus pandemic is affecting U.S. households, including the impact of the child tax credit. The latest Household Pulse Survey collected responses just before and right after the arrival of the first advance payments.

In the households that received the payments, the survey found an overall decline in the share of adults having difficulty paying weekly expenses and sometimes or often not having enough to eat. These declines coincided with the child tax credit payments.

The Household Pulse survey found that about 47 percent of families reported spending the payments on food. Nearly 10 percent of adults in households that received the payments spent the money on child care, according to an analysis by Daniel J. Perez-Lopez, a statistician in the Census Bureau’s division for social, economic and housing statistics.

There are still many eligible families who haven’t signed up to receive payments. Eligible families who filed a 2019 or 2020 income-tax return automatically got their payments. For folks who don’t normally file tax returns and want to get these monthly advance payments, the deadline to use the non-filer sign-up tool is Oct. 15. The IRS has created a portal to file a simplified tax return and register for payments at irs.gov.

Does my newborn qualify? Get answers to questions about the child tax credit.

If you miss the deadline, you don’t miss out on the credit but you won’t get the advance payments. You’ll get the full expanded credit, but only after filing a 2021 return next year.

People signing up by the October deadline will still receive the total amount of the advance payments — up to $1,500 for each child 6 to 17 and up to $1,800 for each child 5 and under. The IRS will just divide the payments over whatever remaining months there are. So, if your first payment begins in October, this means you’ll get three monthly payments of up to $500 ($1,500 divided by 3) or up to $600 ($1,800 divided by 3).

Calculate how much you will get from the expanded child tax credit

It’s also important to note that most families can get monthly child tax credit payments even if they receive little or no income.

“There seems to be a common misconception that a family needs to have income, work or have a tax liability to qualify for the monthly child tax credit,” IRS spokesman Eric Smith said. “This is not true under the law.”

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This was one of the key changes under the American Rescue Plan, enacted in March. Before 2021, you had to have at least some earned income to get the refundable portion of the child tax credit. Unlike other family-oriented tax benefits, such as the earned-income tax credit, for 2021 families can qualify even if their income is so low that they haven’t been required to file a tax return in years. They don’t even need a permanent address.

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President Biden’s American Families Plan would extend the child tax credit increases for an additional five years. This would be a welcome financial reprieve for parents struggling to feed their families. The evidence is clear. The extra tax dollars are working to break the cycle of poverty that leaves too many children hungry.