There’s good news and bad news for the Child Tax Credit
It looks like defaulted federal student loan borrowers can breathe a huge sigh of relief.
As CNBC reported, these people won’t have to worry about having their enhanced child tax credit refunds seized by the Department of Education this tax season.
While the federal government’s pause on student loans protects repayments issued before May 1, those who received benefits after that date did not previously have the same protection.
“The continued pause in student loan repayments has helped protect child tax credits for millions of borrowers, including those in default,” an Education Department official wrote in a mailed statement. electronic.
“The Department of Education will ensure that families do not have their CTC benefits seized through the Treasury cleared this tax season, including refunds issued after May 1,” the official continued.
Between July and December, the US bailout provided eligible parents with enhanced child tax credit payments of $3,600 for a child under six and up to $3,000 for children aged six. at seventeen. Broken down, this all meant that a payment of $250 or $300 for each child was paid to parents each month.
These households are now entitled to the second half of the tax credit money.
“Parents who received all or part of the monthly tax credit payments are also eligible to receive another stimulus payment in 2022. Indeed, the monthly checks that were issued in the second half of 2021 only represented the half of the total child tax credit payment. notes personal finance expert Angelica Leicht at The Motley Fool.
“The other half must be claimed on your taxes, so be sure to do that when you file. You may be owed up to $1,800 per eligible child, and that money will be paid out as part of your tax return. after your tax returns are processed by the IRS,” she adds.
Fight to save CTC
Meanwhile, the ongoing fight to save the enhanced child tax credit continues in Washington as lawmakers seek to pass a form of the highly controversial Build Back Better legislation. If passed, the bill could add an additional twelve months to popular appropriations.
However, Sen. Joe Manchin (D-WV), whose vote is key in an evenly divided Senate, opposes the bill, saying it would only discourage people from working and that any additional federal spending would not would only further fuel inflation which has already reached its highest level in four decades.
In response, top Senate Democrats are pressuring President Joe Biden to keep the enhanced Child Tax Credit as the “centerpiece” of the stalled welfare spending legislation.
“The consequences of not extending the CTC expansion are dire, especially as families face another wave of the COVID-19 pandemic,” the senators wrote in a letter to the president.
“Without expanded credit, nearly ten million children will be pushed back or deeper into poverty this winter,” they continued.
Ethen Kim Lieser is a Washington State-based science and technology editor who has held positions at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow him or contact him on LinkedIn.