What NYC Families Need To Know About The New Child Tax Credit Payments Coming Their Way

New changes to the federal child tax credit policy could mean that for the first time ever, an estimated 275,000 to 400,000 of New York City’s neediest families will be able to join the program that will send families monthly cash payments starting July 15th.

Under President Joe Biden’s American Rescue Plan, the annual child tax credit amount increased from $2,000 per child over the age of six to $3,000. Families with children under the age of six will see an increase in the annual credit from $2,000 per child to $3,600. The age limit was also raised to 17 years old from 16 years old.

Half of the child tax credit will now be paid in six monthly cash installments to families this year, with the other half showing up as a tax credit next year.

That means starting July 15th, most families who qualify will receive $250-$300 monthly either through direct deposit if the IRS has previously paid refunds to their bank accounts, or via checks or debit cards sent in the mail.

The Biden administration said 90% of families in America will see some kind of aid. Families who make up to $150,000 for two working parents or widows/widowers will receive the full credit. Families with a single working parent making up to $112,500 will receive the full credit, as will single parent households making up to $75,000. Families that earn more than the upper threshold will receive smaller amounts reduced by five cents for each dollar above those income limits.

The program is also now available for families who made too little money to file a tax return—a change that helps an estimated 275,000 to 400,000 New York City families who were previously excluded from the child tax credit policy, according to one expert at the Robin Hood Foundation which tracks poverty in the city.

“In the past, many, many people were left out,” said Sarah Oltmans, Chief of Grant Strategy at Robin Hood. “We estimated about 60% of families in the Bronx either didn’t get any money at all from the child tax credit or only received a partial payment, so this tries to change that.”

Families who didn’t file a tax return in 2019 or 2020 can sign up to receive the child tax credit payments through the federal government’s Non-filer Sign-up Tool website allows them to enroll.

For families without a permanent address, the IRS suggests filing a return and providing bank information for direct deposit, or providing an alternate address. For families without a bank account, “you can put down an alternate address if you do not have a permanent one, according to the IRS. This address could be that of a friend or relative, a trusted service provider like a shelter, day-care center or transitional housing program,” CNBC reported. “This is where the IRS will send your refund, as well as the monthly child tax credit payments going forward. The payments will come either as a paper check or a debit card, according to the IRS.”

The switch to monthly cash payments will help families more immediately than a yearly tax credit, said James Bishop, Director of Support Services at Mosholu Montefiore Community Center in the Bronx.

“We found that when our clients have options, they do better,” Bishop said. “For a lot of people, this is how they’re going to buy their kids uniforms and things of that nature, things that they struggle with doing regularly.”

Helping struggling families also has long-term benefits for a society, said Christopher Wimer, Co-Director of the Center on Poverty and Social Policy at Columbia University, who called the program “a long term investment in kids’ futures.”

“We’ve done work on looking at the benefits and costs of the program. And we find that the program more than pays for itself in terms of longer-term improvements, in mostly children’s health and longevity, but also their long-term earnings, and other benefits like reductions in involvement in the child welfare system or reductions in involvement in criminal justice, etc,” Wimer said.

While the expanded child tax credit program is only for the next year, Biden is seeking to extend it for four years and Senator Chuck Schumer vowed he’ll work to make the changes for good.

“Many of us would like to make it permanent,” Schumer said at a press conference Thursday. “But we’re going to extend it. It will be extended for sure for a very significant amount of time, and we’ll see if we can get the permanence that we are fighting for.”

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