Joe Biden’s expansion of the US Child Tax Credit (CTC), this summer immediately reduced America’s high level of child poverty by a quarter. While the benefit is available to approximately 67 million children, it’s not eligible for many families who are most in need.
The amount parents could claim jumped from $2,000 (£1,464) per child annually, to up to $3,600.
Benefits are paid monthly and not just at the time families file annual taxes. This means that those who need it most will get assistance sooner.
To receive the assistance, however, you must be registered with Internal Revenue Service (the US tax agency). According to government estimates, up to 2.3million families do not have this status.
Experts say that these families will be most in dire need of assistance.
Kimberly, not her real name, is eligible for the tax credit. She hasn’t received any payments since July.
Since the beginning of the pandemic, the 22-year old former waitress isn’t working and she relies heavily on her husband, who is a painter. The couple are having difficulty paying their rent and medical bills.
She said, “It is really unfair” and pointed out that she wanted to buy baby milk and nappies.
“So many parents have already received this money but we all have the exact same needs.”
Kimberly is an illegal immigrant from El Salvador and can receive the tax credit, as her daughter was born in America. For the cash to be available, Kimberly needed a “Individual Taxpayer ID Number” (ITIN).
The IRS took five months to approve her application for the one she requested in April. This was due to Covid-related backlogs.
Kimberly missed the CTC payments for her first four CTCs, which were supposed to have been made automatically into her bank account. Additionally, Kimberly claims the IRS is still unable to inform her when cash will be available.
According to an IRS spokesperson, the BBC could not discuss individual taxpayers. However, he added that “Eligible people will still be eligible for Child Tax Credit payment this year if they do not file their 2021 tax return.”
Children in the US are classified as poor if their family’s annual income is below $25,701 or $2,141.75 for a four-person household. Many children don’t have the basic necessities like food and clothing for school.
Elaine Maag, who is a Washington DC-based economic think tank, said that the CTC program has been “tremendous” in general. She adds that all social security programs have “imperfect participation”.
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She says that it’s often the poorest Americans who don’t have tax registrations – these are those missing the CTC.
ITIN problems aren’t just for immigrant families. They also include new moms whose children haven’t received social security numbers and parents who never paid taxes because they have no income.
Some eligible families of immigrant children don’t apply because it could jeopardize their rights to remain in America.
A new round of payments is being made today from the expanded Child Tax Credit to eligible families.
Be on the lookout for a $250 to $300 payment labeled “CHILDCTC” in your bank account.
The American Rescue Plan is available for assistance.
— President Biden (@POTUS) September 15th, 2021
Biden’s administration has created a portal to sign up with IRS in order to help non-filers access the CTC.
The company is also carrying out awareness campaigns, making information accessible in Spanish and making it available to Spanish-speaking people after originally only providing English versions. Surveys show Spanish-speaking households are less likely than other languages to have been informed about tax credits or to have had a CTC paid.
Tyler Hill, a representative of charity GiveDirectly, says that administration must go further.
These families often are the least well-off and cannot be reached with conventional advertising. He says they aren’t reading President Trump’s Twitter.
His belief is that people outside the tax system are too burdened when they try to apply for benefit.
According to him, “They must find the White House’s website and click through three sites outside before they can create an account. They also need to file with IRS. It’s not easy to meet this high standard given the fact that less than half of filers have a computer and nearly one quarter do not have a bank account. Many also lack permanent addresses.
His belief is that developing African countries and Asian nations can distribute aid more efficiently using easy-to use apps or text messages. Biden’s administration should try to do the same.
Pablo Blank is the head of tax at Casa. Casa is an advocacy organization for immigrant rights in Maryland. He believes that officials need to invest more in immigrant communities that are disproportionately denied access to the CTC. His suggestion is to speed up the processing of ITINs, noting that Kimberly and many other people are in the same boat.
The US Treasury spokeswoman stated that all US department from education to housing are working together to address the issue. CTC adoption is increasing every month. 60 million children will benefit from the fourth October advance payment.
Although the IRS stated that it would take every step to minimize ITIN processing delays in its operations, they were still working to process applications received late May.
Congress only extended the Child Tax Credit by one year in accordance with the American Rescue Plan. This plan was created to aid the US out of lockdown. However, the Biden administration is keen to extend it until 2025.
Ms. Maag remains confident, in spite of the political turmoil on Capitol Hill.
She says that the Child Tax Credit, which has seen many expansions since 1997 was first introduced, has not been reduced in any way. Some of these increases were temporary. If history is an indicator of the future, we are well-prepared.”
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