SIOUX CITY, Iowa (KCAU) – The fourth round of child tax credits roll out to millions of American families on October 15.
The American Rescue Plan increased the child tax credit for millions of American families, some by as much as $1,600. But, the future of monthly payments is still uncertain.
Shelly Hexom is a mother of two kids. She explains how monthly payments rather than a one-time credit at tax time has helped her family.
“It’s been really helpful, you know, I mean childcare, obviously, is something you need year round. It’s not just a one time a year thing that you generally pay for. At least for our family, you know, it’s something we pay year round and so our kids do an afterschool program so that way, you know, both my husband and I can work,” said Shelly Hexom.
With the increase in credits and now monthly payments, your 2021 tax filings will also be affected.
“This was actually an advance on the child tax credit that people have been receiving. They typically would receive the entire tax credit when they file their income taxes, but this year the government gave them an advance for the last six months of the year. So when they file their taxes next year, they will have to reconcile the amount that they have already received,” said Center for Siouxland Grant Writer Susan McGuire.
McGuire cites the global pandemic as the reason these payments were broken up monthly to aid American families.
“I know a lot of them who are kind of struggling, who struggle with COVID, you know, because of illness or whatever, and they’ve had to be off work or they haven’t gone back to work,” said McGuire.
“Anybody with kids knows that childcare is expensive, and you know, for people who, maybe you don’t have family nearby that can help with watching the kids or anything like that during the day, such as our family, you know, we rely on childcare and afterschool programs and daycares and things like that to help,” said Hexom.
Last month, House Democrats proposed a deal that would extend the expanded child tax credit until 2025. But for now, a deal to extend the extra benefits is not complete and would have to pass the House and Senate.
For more information on the child tax credit, who qualifies, and if it makes more sense for your family to opt out, click here.