Child tax credit payments begin to flow to families
METRO DETROIT – COVID-19 has brought a variety of problems for everyone, with parents of young children among the hardest hit.
With the opening, closing or closing of schools, workplaces and daycares or various changes in safety measures, parents have often been upset.
“When COVID started, I was working at the (my son) daycare where Silas went,” said Megan Weins, of Battle Creek, who is a mother of one. “Then we moved and had to find a new one; then it closed. Then we got another one that was too far away. Now, finally, he’s in a new preschool, so he’s had four schools since COVID started. “
Parents like Weins and her husband, Cody Licari, are getting further relief from the federal government’s child tax credit. Parents of children under the age of 18 will receive monthly payments to help them cope with the extra pressure many of them felt during COVID-19.
“The child tax credit was part of the US bailout, so it increased the maximum child tax credit on personal income taxes this year from a maximum of $ 2,000 per child to $ 3,600 for children under 6 and $ 3,000 per child for children ages 6-17, ”explained Dewey Steffen, CEO of Great Lakes Wealth in Northville. “They are available for taxpayers whose modified adjusted gross income is $ 75,000 or less if you are single, $ 112,500 if you are the head of household or $ 150,000 for married couples jointly filing a claim or a widow or a qualified widower. “
The tax credit is sent monthly to families to help them alleviate the additional costs and lost income felt by many people during COVID shutdowns.
“I definitely feel the same difficulties as everyone,” Weins said. “I wasn’t sure if I was eligible for the tax credit, and suddenly my husband, Cody, told me we had $ 300 more in our account. Three hundred dollars is two weeks of daycare, so it’s super useful for us.
Weins said she was lucky since her father, Robert Weins, is a certified public accountant and was able to walk her through the process. Most families have yet to catch up with the new changes.
“My other daughter has three children and she only works part time, so she is even more affected by it. It’s $ 850 a month for her, ”said Robert Weins. “This is one more supplement to help families recover over the next 18 months because COVID has ruined so much in the past year.”
Steffen said the tax credit is designed to be easy to understand, which he says can be a rarity among tax rules.
“It went into effect on July 15, so it’s just off the press,” Steffen said. “It’s not something people will have to deduct from their tax returns in a way that will affect most families.”
“It automatically entered our account. There is nothing boring to do at tax time, ”said Megan Weins. “It does not affect our refund.”
Steffen said most families shouldn’t have to do anything to get the tax credit. Most should already have received their first payment by the end of July.
“To get it automatically, you had to have filed a 2020 tax return,” he said. “If the government has registered your 2020 tax return, it will have already started sending these credits. It’s the same concept they did with per-child payments last year during COVID. “
Those who are having difficulty or are new parents can also take steps to ensure that they get the credit.
“For new parents, or if people haven’t received their payments, they can go to www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021,” Steffen said . “To be eligible, the child must not be 18 before January 1, 2022, and if you had a child in 2021, you are eligible assuming you qualify for the adjusted gross income qualification. You can go to this website and apply, if you are a new parent.
Steffen said the goal is to help families survive and reverse the economic hardships caused by COVID closures.
“It’s done to stimulate the economy after COVID, but it’s also to help families with children in low to middle income families not slide into poverty,” Steffen said. “This is going to be a big boost for low income families. Having the money now is a great catalyst for businesses and industries that receive a boost from the families that receive these payments; it means grocery stores, clothing stores and so on. The big problem is that families who are paycheck to paycheck could have a stopgap to avoid falling into poverty. … The government hopes this will help pay for essentials like doctor’s visits, groceries, etc.
Steffen advises everyone to go to a financial advisor for their particular situation, but added that this is a must-see opportunity for any family with young children.
“It should really help us,” Megan Weins said. “I think it’s been a tough year for everyone. Anything that can help is important.