As monthly payments expire, future uncertain for annual child tax credit – Salisbury Post

By Natalie Anderson
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SALISBURY — Policy researchers say monthly payments of the Annual Child Tax Credit throughout 2021 have helped millions of families and children living in poverty.

The future of these payments depends on federal lawmakers, but the researchers say it’s also not the only anti-poverty tool in the toolkit.

In the American Rescue Plan Act of 2021, temporary changes were made to the annual child tax credit to help families with child care costs when they return to work and fire their children. to in-person learning. The amount of the credit has been increased, with eligibility extended to low-tax-income families by making it fully refundable for those who do not earn enough to file their taxes. In addition, half of the overall credit was distributed in monthly installments from July to December.

The credit offered families up to $300 per month for each child under age 5, with $250 distributed for children ages 6 to 17. The credit was available to families earning up to $150,000. Previously, families could claim the credit as a lump sum when they filed their taxes.

Now, the future of these monthly payments is uncertain. At the moment, the modifications have expired as well as the monthly distributions. However, it is one of the key measures included in President Joe Biden’s Build Back Better program, which Biden called on Democrats to review.

Logan Rockefeller Harris, policy researcher at the North Carolina Budget and Tax Center, said the increase in monthly payments has affected nearly 1.2 million families in North Carolina, supporting the well-being of nearly 2 million. children. Research shows that the vast majority of those payments went for housing, food, utilities and child-raising costs, Harris added.

Research from the Center on Poverty and Social Policy at Columbia University estimates that October payments alone lifted 3.6 million children across the country out of poverty that month. The monthly child poverty rate fell from 15.8% in June 2021 to 11.9% in July 2021, the month these regular payments began. Additional research from the school showed an almost 25% reduction in food insecurity among low-income families.

Overall, Harris said the expansion is “a very clear and very effective way to reduce family poverty and child poverty,” particularly because it’s the most direct way to send money. help for families. No action to maintain the expanded credits that have made payments more generous, she added, can harm families who need the help and are no longer eligible for a fully refundable credit if they earn too much. little to file their income tax return.

“It is estimated that with payments stopped, there is a potential for around 300,000 children to fall back into poverty or deeper into poverty,” she said. “Especially with the surge of omicron and many families not having access to paid time off from their jobs, it’s really kind of a tragedy that those payments are ending right now. And we very much hope to see the federal government to pursue this policy, which has proven to be very effective, and we will advocate for it.

Kannapolis resident Julie Waitt, mother of children aged 7 and 13, said the payments helped with bills, groceries and other childcare and household needs. Waitt likes the idea of ​​claiming half of the monthly payments, but added that she was curious what impact that would have on the lump sum she normally claims on her taxes.

Salisbury resident Dan Doiron, who has a 14-year-old child, said he received the $250 monthly payments but they didn’t help much with childcare costs. He said the lump sum claimed at tax time is sufficient.

“I personally used the lump sum to bolster my kids’ college savings account,” Doiron said.

Harris said the monthly installments can be especially important for low-income families, who can use these monthly increases to cover regular expenses.

“It really makes a difference to have income that comes in regularly,” Harris said. “It can be a lot harder to plan for regular spending when you only get a large amount of money once a year.”

Expanding the child tax credit is just one tool in the toolbox, however, Harris said. While North Carolina lawmakers can adopt their own tax credit policies, they can also reactivate the earned income tax credit that the Republican majority eliminated in 2014.

A total of 30 states offer the earned income tax credit. The National Conference of State Legislatures estimates that the average amount received from the earned income tax credit per filer was $2,476 in the 2019 tax year.

State Representative Harry Warren, a Republican who has represented Rowan County for the past decade, said his office has not received any calls related to the child tax credit. He credited Republicans with ongoing tax reform that has boosted the state’s economic growth, including the increase in the standard personal income tax deduction implemented in the 2021-23 budget. which he says has “generated greater savings for working-class individuals.”

“The results of the 2013 tax reforms and subsequent reforms since have proven beneficial to all North Carolina residents,” Warren said.

Warren said it’s incumbent on lawmakers to always consider revisiting decisions they’ve made in the past because conditions change.

Throughout January 2021, Data for Progress surveyed 1,968 likely North Carolina voters and found that 78% indicated support for restoring the earned income tax credit in North Carolina. The survey examined attitudes towards a range of policies ranging from corporate tax rates, funding for early education and childcare support, and restoring children’s rights. bargaining for public sector workers.

Support rates were quite similar between men and women, and among rural, suburban, and urban voters. A total of 16% opposed it, with the greatest opposition among rural voters.

“We know from the data that it measurably improves the lives of families. It means they have the money to put food on the table, to pay their bills, to pay for their children’s education,” Harris said. “It would be a shame not to continue what is a really effective policy that will improve the lives of our families and our communities in North Carolina.”

Contact reporter Natalie Anderson at 704-797-4246.

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