A key feature of last year's expansion of the child tax credit was to make households with low or no income eligible to receive the full benefit. It also made the credit fully refundable, ensuring that even low-income households could receive the full value of the credit. The CTC payment that families will receive when they file their tax return may be reduced to pay other taxes or debts they owe. Several Democrats in the Senate are making a concerted effort to resubmit an expansion of the dependent child tax credit, and experts have noted that the proposal, in isolation, has some bipartisan support.
More than 36 million families received their sixth and last monthly installment of the child tax credit in December. For example, Maine lawmakers increased their property tax equity credit, which will provide a tax credit to households that pay more than 4 percent of their income in property taxes through their mortgage or rent, ultimately helping 100,000 low- and middle-income families. This session, state legislatures across the country invested in their future, focusing children, families and workers by enacting and expanding state earned income tax credits (EITC), child tax credits (CTC) and other refundable credits. To get the remaining half of the credit they're eligible for, they must file a tax return or use the simplified GetCTC filing tool this year.
And for your information, here is a previous article on why inflation is a reason to make the child tax credit fully refundable: that is, taxpayers who owe less tax than the refundable amount will be added to their tax refund, the non-refundable part will reduce the taxes owed dollar for dollar. The American Rescue Child Tax Credit Plan provides the largest child tax credit in history and historic relief to most working families in history. It opposes both the size of the bill and the idea of extending monthly child tax payments. A study by the Center on Budget and Policy Priorities found that credit had helped reduce child poverty in the United States by about 40%.
You can add or change your bank account information through the IRS child tax credit update portal.
