Many American parents who have dependents are already familiar with the federal Child Tax Credit (CTC) but may not be aware of another program that could provide up to $8,000 in payments.
Last year, there were roughly 60 million kids whose parents received enhanced payments from the CTC program. But another tax benefit that is designed for parents has been kept in the dark but could provide more support, up to $8,000 in tax credits this year.
$8,000 Payments
The program called the Child and Dependent Care Credit was supercharged with the help of the 2021 American Rescue Plan signed by United States President Joe Biden. The pandemic bill increased the amount of money that parents can expect to receive on their tax returns for child care expenses. Furthermore, the legislation made the money fully refundable for parents of eligible children.
As per CBS News, being refundable is important because if the tax credit exceeds what Americans owe the Internal Revenue Service (IRS), they can get the difference in their tax refund. While the Child and Dependent Care Credit is anything but new, being around since the 1970s, it has not been able to keep up with the increase of child care costs.
The credit program was designed to support working parents offset the cost of daycare, after-school programs, and summer camps. First Five Years Fund, a child advocacy group, noted in 2018 that the program only covered about 10% of the typical annual cost of care for two children in the United States at the time.
The American Rescue Plan includes a generous expansion of the Child and Dependent Care Credit and the Biden administration designed it to help parents go back to work. Under the new program, parents could get up to four times the previous limit of $2,100.
As per KSL, despite the availability of the programs, some families are struggling to figure out how to file their tax returns and become eligible for the money. But the IRS urged individuals to file their taxes electronically, providing links on its website to free filing websites such as GetYourRefund.org.
Child Tax Credit
Furthermore, United States Vice President Kamala Harris urged parents to file their tax returns to be eligible for the Child Tax Credit payments. She said that families deserve a break after fighting through the coronavirus pandemic.
White House officials, including Treasury Secretary Janet Yellen and American Rescue Plan Coordinator Gene Sperling, worked with non-profit organizations for an event that encouraged Americans to file their taxes. Harris said that if parents were eligible for the CTC based on their income, they should work on getting the payments as soon as possible.
The vice president directed Americans to ChildTaxCredit.gov for information on how they can claim their benefits or determine if they are eligible or not. Biden's American Rescue Plan increased the CTC payments from $2,000 per dependent to $3,600 for children younger than six years and $3,000 for kids aged six to 17, Yahoo News reported.
Related Article: Delayed or Missing October Child Tax Credit Stimulus Payment? Here's IRS Contact Details To Trace Your Money!
