U.S. Rep. Lori Trahan, bottom, leads a Facebook Live discussion about enhanced child tax credits that were passed as part of the American Rescue Act. Speaking with Trahan are Chris Santos-Gordon, director of the Center for Financial Self Sufficiency at Community Teamwork, Inc., top left, and Sarah Bartley, senior director for community impact at the United Way of Massachusetts Bay & Merrimack Valley. Screen capture from Facebook Live
May 14, 2021 at 6:51 a.m.
LOWELL – Parents across the Merrimack Valley and nation can expect to get a second round of help to ease the pain of the COVID-19 pandemic — in the form of monthly cash payments from July to December or a lump sum payment next year — thanks to enhanced child tax credits contained in the America Rescue Act.
U.S. Rep. Lori Trahan, D-Westford, said the existing child tax credit of $2,000 per child was expanded by the American Rescue Act to instead be $3,000 per child and $3,600 for each child under 6 in 2021.
“This is a lifeline for a lot of people, especially those in poverty who stand to get an average of $4,300 per family,” Trahan said.
Trahan led a Facebook Live discussion of the tax credit with Sarah Bartley, senior director for community impact at the United Way of Massachusetts Bay & Merrimack Valley, and Chris Santos-Gordon, director of The Center for Financial Self Sufficiency at Community Teamwork, Inc.
Santos-Gordon said parents will be able to get the tax credits even before they file their 2021 taxes, with monthly cash payments being available for part of the annual credit from July to December.
The monthly payments will be up to $250 for each child under 6, and up to $300 for each child under 18.
Exactly how much each family gets via those monthly payments should be calculated by a tax preparer, Santos-Gordon said.
“You really won’t have to do anything. If you file your taxes already, it’s going to happen for you,” Santos-Gordon said. “I would just suggest you try to get into the IRS portal so you can make a decision whether you want the monthly payments started in July or whether you want is as just one lump payment.”
Families who elect do so can also just claim the full tax credit as part of their 2021 return and refund.
Bartley said families qualify for the full enhanced tax credits if their income is below $75,000 per year for single filers, $112,000 for head of household filers, and $150,000 for those who are married and file jointly. Some who make more than that will still qualify for reduced credits.
“Families are going to see more cash in their pockets,” Bartley said. She said the enhanced credits will increase the average family’s refund by about $2,000 over other years. “This is a really important lifeline for so many households, especially families struggling with lost hours during the pandemic.”
With tax day — delayed by the pandemic — arriving on May 17, Bartley pointed out that anyone can file their taxes for free online via www.MyFreeTaxes.com, which was created by the United Way and IRS.
Bartley said her own family used the website this year, and that while it wasn’t as intuitive as some online tax websites that cost money, she said help was available by phone, and that qualifying families can get free help from a tax preparer as well.
“It screened for things we were eligible for and helped us maximize our return,” Bartley said.
The enhanced tax credits were passed as part of the $1.9 trillion American Rescue Act, signed in March by President Joe Biden in response to the COVID-19 pandemic. The extra tax credits are in addition to direct payments to taxpayers that were already distributed as part of the same law.
For more information on the tax credits, visit: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021.