By Barbara L. Martinez | Guest Writer
In 2021 we did something extraordinary as a nation: we reduced the child poverty rate by more than half by extending the child tax credit (CTC). For six months, consistent monthly payments were deposited directly into parents’ accounts – up to $300 per child.
As a Chicago-based financial coach, I can attest that the child tax credit delivered long-awaited relief for many families in Illinois. In fact, research is now starting to emerge suggesting that the positive effects of this nation-wide antipoverty program were better than expected.
The program has been updated and adapted since being instituted in 1997, and data supports the idea that the child tax credit, if made fully refundable, has the potential to help narrow the racial wealth gap.
Here in Chicago, my practice saw an increase in participants’ financial well-being through their own self-reported stories. In addition, participants shared a greater sense of control of their finances. For one of our participants, that translated into being able to start saving for an emergency.
According to Census reports, about half the families receiving CTC used the money for basic expenses like food and housing, and some – 42% of Black and 31 % of Hispanic families – used it to cover school expenses.
The credit is accessible to families of all income brackets. However, these monthly direct payments stopped in early 2022, and now low-income families are finding themselves without this vital support.
Knowing how important the child tax credit is for low-income families, we need to ensure they receive the remaining child tax credits when they file their 2021 taxes.
Spread the News!
Many parents and caretakers never claimed the monthly child tax credit in 2021 and now are entitled to the entire amount. But they can only claim it if they file their 2021 taxes, and many families are unfamiliar with the tax system because they have never had to file taxes before.
Perhaps this is you, an immigrant to the U.S. who has lived here for at least six months in 2021 or given birth after migrating here. Or perhaps you are in a no-income household and thus have not had to navigate the tax system yet.
Groups around the country have tried to use social media, traditional media, community connections, and government resources to alert these families about the child tax credit. Despite their efforts, many still need to be connected to a tax preparer to claim their CTC this year.
The IRS has decided to keep the tax filing deadline of April 18 regardless of the challenges and delays in getting the child tax credit monthly payments up, running, and accessible. But we’ll walk you through how you can access these benefits.
Every child who was under the age of 18 before January 1, 2022. Parents and caregivers can claim a child as long as the child lived with them and was in the U.S. for at least six months in 2021.
Before You File
Before heading to your tax preparer, wait for IRS Letter 6419. This letter will include the amount you have received in tax credit and how many children you have claimed.
Tax Returns: Accessing Direct Deposit
Families who do not have a bank account but would like to receive their refund by direct deposit should consider looking into getting a safe, certified BankOn account. These accounts have no overdraft fees and no minimum balance requirements. There are 16 individual banks in Chicago and 93 coalitions across the mainland USA.
Questions about CTC, Stimulus Payments, & the IRS
Regardless of your state, you can contact the IRS directly regarding refunds if its app and FAQ cannot answer your query.
Free Tax Filing Resources
- Get Your Refund App
If you are a do-it-yourself kind of person, Get Your Refund is a new, mobile-friendly tool made available by Code for America. This easy-to-use application helps connect new tax filers with free, IRS-certified tax help. In other words, it helps triage you if it is your first time filing taxes or you are unsure of what you need.
- Site Locator for Volunteer Income Tax Assistance
If you are looking for free tax preparation, look no further than the IRS VITA Site Locator. This tool helps you find VITA volunteers in your area. This locator is updated regularly by the IRS from February through April.
- Online Filing
The IRS also offers a list of eight resources where American residents can file their taxes online, for free.
What is Next for the Child Tax Credit?
The 2021 Child Tax Credit expansion was not renewed for 2022. Therefore, there is currently no more advance monthly payment.
Caregivers are now left scrambling as inflation threatens working families. They will have to make the hard choices between spacing their children’s doctor appointments or postponing dental cleanings once more.
What Can We Do?
While we cannot control the outcomes, we can come together to demand action for the sake of our communities. There is no question that American residents have benefited from the Child Tax Credit.
Demand that it be extended by petitioning your representatives in Washington. At the same time, refer your friends and neighbors to the free tax resources listed above so that they can maximize on the 2021 credit before April 18.
Barbara L. Martinez was born on the island of Puerto Rico, a perfect cradle for her unique origin story – an epic journey carved by the emotional trauma of growing up with a parent struggling with mental illness. She has worked in economic development, management, consulting, and financial coaching services for more than two decades. The experience gained in the for-profit world has been beneficial in helping the low-income communities in both NYC and Chicago.
Barbara currently works on several community initiatives as well as in policy, striving to close the racial wealth gap and improve the financial well-being of low-income communities. She oversees community partnerships and asset building programs for a Chicago-based nonprofit. In addition, Barbara sits on the board of BankOn Illinois and has contributed to local and regional conferences on asset building. She received her Master’s in Public Relations from the University of Northern Iowa.