‘It takes away a layer of stress:’ Child tax credit payments hit NC bank accounts
For Durham’s Sarai Faison, a working mother of two, the monthly checks that began Thursday from an expanded child tax credit bring a sense of relief.
During the coronavirus pandemic, Faison and her husband became a one-income household for a time as they juggled virtual schooling for their 9-year-old daughter and caring for their 3-year-old son at home. Now as they transition back to working full-time outside of the house, their expenses, particularly day care, are rising.
“What these payments will allow us to do is pay for child care expenses, and it takes away a layer of stress that is inherent in trying to return to the workforce and financially plan for a new setting,” said Faison, who works in clinical development at a pharmaceutical company.
Millions of parents will receive their first monthly check from the expanded child tax credit Thursday, even as the Biden administration seeks ways to deliver the money to eligible parents who are not signed up.
In North Carolina, 1.1 million families, which includes 1.8 million children, will receive a check in July, according to the White House. Overall, families in the state will receive $476 million in July.
The American Rescue Plan, passed by Democrats in March, expanded the annual child tax credit from $2,000 per year to $3,600 for children under 6 and $3,000 for children 6 to 17. And, instead of being able to claim the full amount when filing income taxes as late as April, it called for prepayment of half the total through monthly checks from July to December.
A married couple with children ages 7 and 9 making less than $150,000 would receive $500 monthly ($250 per child) through December and then be able to claim the remaining $3,000 credit on their tax returns.
The full credit is available to any parents making less than $150,000 (couple) or $112,500 (individual), including those who previously did not make enough money to qualify for the full credit. The tax credit phases out at $400,000 (couple) and $200,000 (individual).
Several policy centers have estimated that the program could cut child poverty nationally in half. In North Carolina, the payments could lift 137,000 children out of poverty including six in 10 Native American children, half of all Black children and nearly half of all Latino children, according to figures provided by Rep. Deborah Ross, a Wake County Democrat.
In her district, Ross said, the parents of 184,000 children will receive the credit.
“This child tax credit recognizes how hard parents are working to raise the next generation,” Ross said. “This tax credit helps pay for child care. It helps pay for school supplies. It helps when the car breaks down and it recognizes how hard our families are working and how many of these families are living paycheck to paycheck.”
Faison said her friends and others she knows through her time as a volunteer at her daughter’s school will use the money to catch up on rent, get back-to-school clothes or just financially catch up after lost income during the coronavirus pandemic.
“The beauty of it is every family has different needs at different times,” she said.
Michelle Hughes, the executive director of NC Child, said many families in the state have reported financial troubles.
“What we know is one-third of all adults in North Carolina are reporting they’re struggling to pay for food, rent, health care, transportation. This money is going to be a huge boost to those families to support their kids,” she said. “This money comes at a time when many families are desperate and can use this financial support.”
Anyone eligible who filed taxes in the last two years will automatically receive the monthly payment. Another 470,000 people with 720,000 children were added when they signed up through the non-filer portal for stimulus checks in 2020 or 2021, administration officials said. About 1 million parents have opted out of the monthly money and will instead claim the entire credit when they file their taxes
The IRS estimated that about 39 million families with 60 million children are eligible. The Treasury Department said roughly $15 billion was being sent to families Thursday, a figure that could rise each month as more eligible parents get signed up.
People who did not file taxes and have not signed up through the stimulus portal can register at IRS.gov. As many as 5 million families nationally could be missing out, Hughes said.
“One of the biggest challenges is making sure parents know this support is available to them. NC Child and other agencies are working to get this information into the hands of parents, especially low-income parents who often have not made enough money to file taxes and are going to miss out on this opportunity,” Hughes said.
The expanded child tax credit is only in place for one year, but Democrats are pushing to extend the additional credit. The Biden administration wants to extend the credit for years and years, making it part of the nation’s overall economic security compact. A budget proposed by Senate Democrats includes an extension of the expanded child tax credit.
Ross, like most Democrats, supports making it permanent. She and other Democrats are hosting events and working with community organizations to make sure parents know the credit exists and, if they are not getting it, to register for it.
Hughes said there will be measurable impacts from the additional money, though it may take a few months.
“I am hoping what we’ll see is a decrease in hunger and food insecurity. We’ll see children showing up to school ready to learn, in stable housing and being fed. We do think we will see some measurable change in children’s health and well-being as a result of the child tax credit,” Hughes said. “One thing we all need to remember is that growing up in an economically insecure family, growing up in poverty, growing up in a low-income family, it’s a huge stressor for those families and those kids and it has an impact on those children and their development.”
For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at link.chtbl.com/underthedomenc or wherever you get your podcasts.
This story was originally published July 15, 2021 at 11:37 AM with the headline "‘It takes away a layer of stress:’ Child tax credit payments hit NC bank accounts."
