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YPSILANTI, MI – Three months before the COVID-19 pandemic changed the lives of countless families, Brittany and Paul Carryer bought their first home together in Ypsilanti. Fifteen months later, their first child, Jasper, was born.
Between the fact that both of their careers were altered by the pandemic and Brittany developed pregnancy cholestasis that resulted in medical bills of $ 3,000, the Carryers were hit with unexpected life events that put them at risk. financial hardship.
As a result, the enhanced child tax credit in the US stimulus package will provide cardholders with “breathing space” in the form of the $ 3,600 they plan to spend on everything from paying down debt to credit card debt. credit from medical bills to mortgage payments to food and clothing for their child.
âWe weren’t planning on getting pregnant, but we got pregnant,â Brittany said. âIt’s been a big change in income and the way things have gone over the past year and a half, and now with our little three month old baby, the extra $ 300 a month is going to let us breathe. The pandemic has changed the way our finances look a lot, especially after buying a house. “
How to make sure your Child Tax Credit payment goes to the correct bank account
While the enhanced child tax credit is available to all low- and middle-income families, it will have a particularly significant impact for those with incomes below the poverty line.
In Washtenaw County, the Child Tax Credit will reduce the number of children living in extreme poverty – families with incomes below the federal poverty line – by 56%, from 4,126 to 1,828 children , according to analysis by Poverty Solutions at the University of Michigan.
The improved child tax credit will reduce the percentage of children living below the poverty line by 36%, from 14% to 9%, from 9,356 to 5,950 children.
The first of six advanced child tax credit payments was due to hit bank accounts on Thursday, with physical checks also being sent out this week. The IRS estimates that 39 million families will receive the payments, which will reach 65 million children in the United States
These payments are part of the US bailout, which was passed in March and increased the total credit from $ 2,000 per child to $ 3,000 for each child aged 6 to 17 and to $ 3,600 for children. under 6 years old.
In addition to the maximum credit increases per child, the child tax credit will be fully refundable, with low-income parents eligible for the full benefit even if they are not working. Previously, only $ 1,400 of the $ 2,000 credit was fully repayable.
For these families, the enhanced child tax credit will be equivalent to an additional credit of $ 1,600 per child, provided the family files taxes in a normal year. For families who do not file income tax returns because their income is less than $ 12,400, the real impact of the enhanced child tax credits is even greater.
âPreviously, you had to have some earned income to receive the child tax credit,â said Afton Branche-Wilson, deputy director of community initiatives at Poverty Solutions, noting that families don’t need to have a child. income earned to qualify for the Child Tax Credit.
“This means that we extend our support to the poorest families in the United States, recognizing that for them child care, rent, groceries, etc. are quite expensive and it is important that the government support this essential role. “
The enhanced child tax credit also gives families the option of receiving money in six monthly installments, before receiving the rest at tax time, Branche-Wilson said, while providing families with the option of receiving. the full lump sum at tax time.
âNormally you get tax credits at tax time,â she said. âRecognizing that the pandemic continues to affect the health and economic well-being of families, the people of Washington have decided to extend half of the child tax credit payments as an advance. This is why we see payments from July to December, as opposed to payments just at tax time.
Tanisha DesRochers, who recently moved from Ypsilanti to Belleville, said the child tax credit would meet their three-year-old daughter’s immediate needs, such as furnishing her new bedroom and paying for childcare costs. With the father of his child living in Redford, it is even more difficult to obtain affordable and conveniently located child care.
âChild care fees are ridiculous right now,â she said. âYou can’t have a regular full-time job and pay for child care, so you have to choose between the two.
âIt’s hard because I feel like a lot of opportunities have been taken away from me, because it’s so hard to find daycare and it’s so hard to afford it.
DesRochers currently has to work from home in order to avoid paying for child care, thus eliminating the possibility of working at a job with more traditional hours. She works at home as a nail technician while watching over her daughter.
When she has to leave home to care for another disabled child for her second job, she takes her daughter with her.
âThree hundred dollars (a month) can buy a lot of diapers, a lot of formula, a lot of things for a family, so that’s just important,â she said.
Since the enhanced child tax credit is currently only available for the coming year, Branche-Wilson said it is important for families to make sure they receive their payments.
To determine where checks are sent, the IRS uses the direct deposit banking information provided to it on your most recent tax return. If you have not provided this information, a physical check will be sent to the address on file.
A tool recently launched on the IRS website allows you to update your banking information and change your home address so that payments reach you as expected on the delivery dates.
To update your information in the tool, you will need to visit the IRS Child Tax Credit Update Portal and click on the “Manage Advance Payments” button to determine if you are eligible and how. the IRS plans to send your payment.
Once you have determined your eligibility status, you will either need to sign in with a previously created IRS account or create one through the ID.me option. To use the ID.me option, you will need to upload photos of your state-verified ID and allow the IRS to use your webcam or camera to scan your face and match that photo to that of. your identity document.
âThis is a great opportunity, and we hope to see a mobilization of community organizations, government and others to ensure that families receive this message,â said Branche-Wilson. âThis credit is not just for low income families, it is for families of all income levels, just about all except the highest incomes. So this is really something that we hope will benefit a wide range of community members.
Carryer said she hopes the improved funding for the child tax credit will continue beyond this year, given the large expenses associated with raising a child.
âThe kids take a lot of it, and it’s better if you can ensure that there is at least a minimum standard of living,â she said. “It will just be better for the population as a whole.”
For more information on the Enhanced Child Tax Credit, visit UM’s Poverty Solutions website.
READ MORE:
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