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Families across the country received the first of six monthly expanded Child Tax Credit payments Thursday, but some who need it most may be missing out.
According to a recent study conducted by SaverLife, a non-profit organization focused on helping people build financial security, one out of five of its members did not file taxes last year. Of those who have not filed taxes, 78 percent said they heard some, little or nothing about expanded Child Tax Credit payments, or that nonfilers require extra steps to get them.
“For those families, it’s not too late,” Radha Seshagiri, director of public policy and systems change for SaverLife, told Audacy.
She said families can sign up, whether or not they have filed tax returns, through the Child Tax Credit Portal. This portal is available on desktop and mobile devices.
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What is the Child Tax Credit?
Overall, 39 million families are expected to receive expanded Child Tax Credit payments as part of the American Families Plan. This program is intended to decrease child poverty and grow the U.S. middle class.
Maximum annual credit amounts are $3,600 for children under 6 and $3,000 for children between 6 and 17. Half of the credit could be distributed as an advance as six monthly installments (the first of which went out Thursday) and half will be included when families file their 2021 taxes.
The largest monthly payments – $300 for children under 6 and $250 for children aged 6 to 17 – will go out to families with a joint income less than $150,000 or individuals with income less than $75,000.
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What might prevent people from receiving the funds?
“The expanded Child Tax Credit has the potential to end extreme poverty – and cut child poverty in half – especially among Black and Native American children. But only if the help reaches families,” said SaverLife.
If families did not file tax returns in either 2019 or 2020 because had too little income to file or had a source of income that is not taxable, they will most likely not receive automatic payments and must sign up through the portal, Seshagiri explained.
Outreach about the credits to low and middle-income families, who are often time-constrained from multiple jobs, caring for children and caring for elderly family members, is especially important, she added.
Seshagiri said that misconceptions about the program can discourage eligible families from signing up. Families who did not file taxes are twice as likely to have these misconceptions and 30 percent of overall families polled said they did not know much about the program, according to SaverLife data.
Survey responses from 498 individuals who identified as having dependent children collected between June 17 and June 24 were used to compile data.
"Many believe – incorrectly – that receiving federal benefits such as SNAP makes them ineligible to receive the Child Tax Credit,” said SaverLife.
What are the next steps?
SaverLife is working to make sure that its members and others know about the Child Tax Credit, according to Seshagiri.
Help from the federal government, especially with the Child Tax Credit online portal, could also increase enrollment.
“We tested out that website internally,” and found that it was hard to use, said Seshagiri. “We would call on the federal government to improve that.”
According to SaverLife data, 57 percent of their members would prefer to enroll through a website on their phone. Some of those eligible do not have desktop computers and use mobile devices as their primary way to access the internet, Seshagiri explained.
If families are able to sign up right away, they can begin receiving monthly payments Aug. 15. Any payments sent out before a family enrolls will be included along with their second half lump-sum payment, said Seshagiri. Families can also file to get the whole sum if they do not enroll in time for monthly payments, she added.
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For families who are already struggling to pay bills and will soon need to buy school supplies, signing up quickly is crucial.
“We see what a difference this will make,” Seshagiri told Audacy. She said SaverLife will work to help its members to save some of their Child Tax Credit money they receive to help build financial stability. SaverLife is free to join for all.
"The tax credit is a lifesaver because now I’ll have some type of income. That $900 is a big deal," said a SaverLife member with three children under age 6. "Part of it will be used for the kids, part for the new baby, and part will go to a new place. I don’t get money for the new baby until next year. In July and August, I’ll use the money to find a new place and buy baby stuff. In September and October I’ll need to buy the kids fall clothes.”
Anyone applying for the credit should go only thorough the official portal or the IRS website to avoid Child Tax Credit scams, Seshagiri warned.