Lack of awareness will cost child tax credit

Low Awareness of Child Tax Credit Payments Could Exclude Poorest American Households

The child benefit payments, set to begin on July 15, requires typical non-filers to register with the IRS.

The Biden administration announced Monday, May 17 that 39 million American families will begin receiving monthly payments on July 15 as part of the expanded child tax credit passed in the American Rescue Plan.

The child benefit will begin disbursements of $250 – $300 per child each month until December, with the remaining 6 months worth of payments reaching parents as a lump sum payment in 2022.

However, a majority of Americans are unaware of the benefit according to a recent poll conducted by Data For Progress. 53 percent of the poll’s respondents expressed knowing little or nothing about the monthly payments, which are expected to cut child poverty in half.

The IRS says that 88 percent of children will receive the payments. According to the last CPS ASEC, around 2 percent of children are too rich to be eligible for the CTC. The 88 percent indicates that about 10 percent of eligible children will not receive CTC payments, mostly due in part to living in a non-filing household.

The lack of awareness surrounding the policy has been a cause of concern for members of Congress, as well as the White House, which has expressed support for the policy’s extension to 2025 and beyond.

According to “The Hill,” a group of more than 50 House members urged the IRS to use the information it obtained from a stimulus payment-related web tool to increase outreach about the child benefit, especially to low-income families who may not be aware of their eligibility.

“The IRS has a limited-time and unique opportunity, while the information is still fresh, to conduct targeted outreach to these low-income non-filers who may be unaware of their eligibility for these important refundable tax credits,” wrote the lawmakers in a letter to the agency.

The Biden administration’s press release announcing the July 15 start date for payments also included mention of an IRS web portal designed to aid late tax filers and typical non-filers with notifying the Treasury Department of their eligibility for the monthly payments.

Still, with a majority of Americans unaware of the policy or their eligibility for the child tax credit, the announcement’s timing on May 17, the federal tax filing deadline, provides only a narrow window for Americans to make their eligibility known to the IRS.

“The one time to be proactive is now,” said Greg Nasif, political director for Humanity Forward. “Folks who typically don’t have to file their taxes are the ones who stand the most to gain from the Child Benefit, but they have to be proactive and tell the IRS that they’re eligible. ”

When combined with the low level of awareness surrounding the child tax credit policy to aid non-filers and lack of internet access, the web portal for notifying the IRS of tax credit eligibility is likely to exclude many of the millions of children who stand to benefit.

Humanity Forward is a 501(c)(4) non-profit organization dedicated to building bipartisan coalitions to advance the economic interests and policy priorities of the American people.

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