The Child Tax Credit- Amazing News for Our Families
The upcoming Child Tax Credit that passed as part of the American Rescue Plan has been in the news lately. For many of the families that work with Family Promise, and many low to moderate income families nationwide, tax credits make a big impact on their lives. Families that are housed and participating in our Stabilization programs typically use those funds to purchase a vehicle or repair their family car, pay down past debts, or start or build a rainy-day fund.
I am excitedly anticipating the good that will accompany this tax credit for Heidi’s family. She and her five children are homeless after fleeing domestic violence. Currently, Heidi’s only income is Temporary Assistance for Needy Families (TANF), but in July, with the upcoming credit, she will receive an additional $1,300 per month. This money will help the family afford some of those things that many of us take for granted every day: food, clothing, and a safe place to stay.
Here is how it breaks down for families with children:
Families qualify if:
· The children in the household are ages 0-17
· Single parent annual income is under $75,000
· Married parent annual income is under $150,000
The expanded Child Tax Credit increases the maximum credit a family can receive to $3,000 per child, per year, for children 6-17 and $3,600 per child, per year for children under 6. The overall credit is divided into monthly payments. Families can expect $250 per month for each child between 6 and 17 and $300 per month for each child under 6. In 2021, families will receive half the annual amount as a pre-payment in monthly installments and the other half when they file taxes in early 2022.
The Child Tax Credit does not count as income for federally-funded benefits, including SNAP or TANF, so it will not reduce other benefits that many low-income families rely on.
It is thought this upcoming tax credit will cut the child poverty rate in half. It’s amazing news for many, but for Heidi’s family, it will provide some of the much needed funds to bring some stability to their lives.