This year, one of the White House
's top priorities is to reduce child poverty
by beginning to send monthly checks to parents in July.
“We will lift half of America’s children
out of poverty,” Vice President Kamala Harris
said on Friday, describing the anticipated policy achievement as her favorite part of her job.
However, because the checks are technically tax credits, the money
must be sent by the Internal Revenue Service, which may struggle to reach some of the millions of people
who do not file federal taxes
To that end, Harris visited a child care center in Washington
, to promote the expanded child tax credit
approved by congressional Democrats
as part of the American Rescue Plan
, as well as to announce a new “Child Tax Credit Awareness Day” on June 21.
“I’m here to ask you all, as leaders, to be a part of that, of raising awareness of what has been designed to help folks, to make sure they know,” Harris said to a group of teachers and administrators at the child care center. The IRS
also has a promotional awareness day for the earned income tax credit.
The American Rescue Plan, passed by Congress in March, increased the child tax credit from $2,000 to $3,600 for children under the age of six and $3,000 for children under the age of eighteen. Instead of simply reducing people's tax bills, the IRS will distribute the credit as an advance payment beginning next month, with the vast majority of households with children receiving payments of $250 or $300 per child.
The money for parents could dramatically alter politics
by providing a monthly benefit for both middle-class and poor parents, similar to the kind of child allowance that other wealthy nations have long provided parents.
Are you already budgeting with this extra cash in mind, Stardia readers? Tell us about it by emailing [email protected]
and including your phone number if you'd like to be interviewed.
According to an analysis of IRS data by the People's Policy Project, a left-wing think tank, approximately 12 million Americans did not file federal income taxes in 2020 because there is no filing requirement for people who do not earn enough income to owe federal tax. As many as 10% of children live in non-filing households that should be eligible for the payment.
The IRS collaborated with the Social Security
Administration to send coronavirus
relief checks to many of them, but several million went unnoticed.
“The IRS has no way of reaching children in non-filing tax units, and no one has produced a plausible story about how they will do so,” PPP founder Matt Bruenig wrote last month. “Filing taxes is complicated, and the poorest of the poor cannot afford to pay a third-party preparer to do it for them.”
During a Senate
hearing this week, IRS Commissioner Chuck Rettig stated that the IRS has collaborated with over 10,000 local organizations to publicize the credit.
“Because individuals don’t always go to IRS.gov for information, we’re working with literally thousands and thousands of community-based organizations across the country to distribute information,” Rettig explained.
Rep. Richard Neal (D-Mass. ), one of the primary authors of the child tax credit legislation, announced Friday that the IRS would launch a new online portal this month where non-filers could enter their information to receive payments.
“These credit advance payments will ensure families receive this critical support when they need it the most, all while dramatically reducing child poverty,” Neal said.
However, estimates of how much the new tax credit will reduce poverty include the full amount of the benefit; however, parents will only receive half this year because monthly payments begin in July, and will receive a lump sum for prior months at tax time next year, after which the expanded credit will expire.
Democrats and President Biden
have stated that they will pass legislation to extend the credit until 2025, but no legislation has been introduced.