Live updates on monetary and financial news: IRS letter 6475, request for $1,400, child tax credit, tax returns…


Families and businesses are beginning to resent the lack of child tax credit payments

The American rescue plan enhanced child tax credit which has existed for almost three decades in a few specific ways in addition to increasing the amount households could claim per child.

He removed the $2,500 compensation floor to begin claiming the credit, the amount a taxpayer was eligible for increased by the amount they earned up to a maximum of $2,000 per child. The same time he made the entire credit refundable, so that parents can receive full credit even if they had no “earned income”. These two features have greatly expanded access to the tax credit to low-income and non-traditional families such as those where grandparents, who have no earned income, are raising their grandchildren.

A major credit modification was the creation of a monthly prepayment system which began in July last year and lasted six months. These payments began as many families began to run out of funds following the third round of stimulus checks and just weeks before enhanced unemployment benefits expired.

Payments stopped in December when the Build Back Better Act failed to pass the Senate before the changes expire. The absence of a monthly reminder is now felt not only by families but also by businesses. Families who could not afford daycare, after receiving the financial assistance, enrolled the children in daycare.

However, now that the payments have stopped parents had to make tough choices with limited budgets and let the children out. Many choose not to work and stay home with their children.


Comments are closed.