Update on the Child Tax Credit: 4 Million Children Could Lose Payments Under the American Rescue Plan
According to a new research, around 4 million children from low-income households may lose out on receiving the monthly child tax credit payment this year.
Since July, the American Rescue Plan has permitted the IRS to pay qualifying families up to $300 per month per child under the age of six, and $250 for older children under the age of eighteen.
The children of parents who did not submit their information through the IRS non-filer portal, file a tax return, or use the portal to claim their Economic Impact Payments (EIPs) are at risk of losing their monthly child tax credit payment for the rest of the year, according to a report released on Thursday by the Center on Budget and Policy Priorities.
According to data acquired by Medicaid and the Treasury Department, 4 million children will be at risk of losing their enhanced child tax credit monthly payment. However, the estimate is incorrect, which indicates that many more children may be affected.
Elaine Maag, a lead research associate at the Urban-Brookings Tax Policy Center, said, “We don’t exactly know how many children are completely outside the tax system.” “No one knows what the target number is,” says the narrator.
The estimate was based on a number of facts, including the 2.3 million children who were not reported by a parent on a previous tax return but are enrolled in public health-care programs to help low-income families.
Meanwhile, another 1.6 million children with Medicaid coverage are scheduled to be born in 2021.
The IRS will automatically send advance payments to families who have either filed their taxes or used the EIP. The IRS will be able to distribute monthly payments for the child tax credit from July through December as part of the Rescue Plan.