Congressman Higgins Shares Details on the Expanded Child Tax Credit
Congressman Brian Higgins (NY-26) joined community partners to provide details on the improved Child Tax Credit and the positive impact it will have on Western New York families.
Higgins, who serves on the House Ways and Means Committee which oversees tax policy, said, “Many hardworking Western New York families struggle with the costs associated with the most basic needs of food, clothing, healthcare, childcare and housing. We know children who lack access to these essentials often don’t thrive in school and face additional health and economic challenges as they grow into adults. The expanded Child Tax Credit is a proactive investment in families that helps put children on a path to success.”
“I am happy to see these government support programs help ease pressure on household budgets and support for child care,” said Amherst Town Supervisor Brian Kulpa. “The more money working families have in their pockets, the more they can look forward to a return to normalcy.”
How does it work?
The American Rescue Plan Act, supported by Congressman Higgins and signed into law, increased the Child Tax Credit from $2,000 per child to $3,000 per child between the ages of 6 and 17 and to $3,600 for children under age 6.
Rather than simply receiving the credit when you file taxes, the legislation allows for families to receive the credit in advance in the form of monthly payments of $300 for each child under age 6 and $250 per child age 6 and up. Approximately 80 percent of eligible families will receive the payments through direct deposit into the bank accounts on file with the Internal Revenue Service (IRS). The remainder will receive a paper check.
Families can receive up to 50 percent of the credit, as much as $1,800 per child under age 6 and $1,500 per child up to age 17, through this monthly payment initiative during the last six months of 2021. The other 50 percent will be issued in your tax return when you file 2021 taxes next spring.
Shatorah Donovan, Chair of the Beverly Gray Business Exchange Center, said, "The expansion of the Child Tax Credit will make a significant impact on the lives of children and families in the City of Buffalo and throughout Western New York. Through this improved program the burden of providing the necessities of life will be reduced for those who need it most. Instead, those who benefit from this provision will be able to focus on following their dreams like entrepreneurship and building generational wealth, which will strengthen the economy in this region for everyone."
What does it mean for Western New York families?
The improved Child Tax Credit will strengthen the middle class and cut child poverty in half. Approximately 91 percent of the children in Congressman Higgins’ district and nearly 400,000 children across Western New York’s three Congressional districts will benefit. The credit will lift 9,500 children in Congressman Higgins’ district alone out of poverty.
“We fund what we value, and this tax credit says that we value our youngest assets and we value lifting families out of poverty,” said WNY Women’s Foundation Executive Director Sheri Scavone. “It says we are all dedicated to seeing WNY women and families thrive.”
“Child hunger and poverty have long been major issues in Western New York, and the pandemic only has increased hardship for many families. In 2020 alone, FeedMore WNY provided food assistance to nearly 71,000 children. We believe the expanded Child Tax Credit will help provide stability to families so they do not have to make impossible choices, including choosing between paying the rent and putting food on the table,” Tara A. Ellis, president and CEO of FeedMore WNY, said.
What do I need to do?
The IRS estimates 39 million households, including 88 percent of children in the United States will automatically receive the monthly Child Tax Credit payments without further action. AnchorPayments will begin on July 15th and continue to be distributed on the 15th of each month through December.
If you have not yet filed your 2019 or 2020 taxes, are not required to file taxes or if your personal information has changed since filing taxes additional steps are necessary to receive the credit. Non-filers should use the following online tool to provide the IRS with additional information: https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool
A second portal will be available on the IRS website soon to allow people who have filed taxes to update their address, bank information, income level, or family status. There will also be an option to unenroll for those who don’t wish to receive advance Child Tax Credit payments.
“The increase in food budgets, wi-fi bills, additional technology costs at the same time combined with the inability to work has prevented families to keep up financially,” said Parent Network of WNY Executive Director Susan Barlow. “The upfront payments will bridge the gap for many families as they re-enter the work force. The key is to do the research to make sure this is the right choice for your family.”
Who is eligible?
The full Child Tax Credit is available to joint filers earning up to $150,000, head of household filers earning under $112,500 and individuals making up to $75,000. Families earning over those income thresholds but under $400,000 for joint filers and $200,000 for single filers are still eligible to receive a portion of the Child Tax Credit, no less than $2,000 per child, using an income-based sliding scale. The credit falls under $2,000 per child when adjusted gross income levels exceed $400,000 for joint filers and $200,000 for all others.
The IRS website provides answers to additional frequently asked questions about the advance Child Tax Credit: https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-frequently-asked-questions