How families can cope after child tax credit expired
In its first month alone, the American Recovery Act’s Child Tax Credit Expansion kept 3 million kids out of poverty.
LINCOLN, Neb.(KLKN)- In its first month alone, the American Recovery Act’s Child Tax Credit Expansion kept 3 million kids out of poverty. This expired in December.
Tim Kulhanek, financial professional at Stonebridge Insurance & Wealth Management is sharing what the expansion did and what you can do now that it has ended.
How did the child tax credit change for families?
- This one-year provision expanded the tax credit from $2,000 to the range of $3,000 to $3,600, depending on the child’s age, for each child in low to middle income households
- The expansion also converted the credit from something you get with your income tax refund to a monthly series of payments you get throughout the year – so you don’t have to wait as long to use that money
- These payments were reduced for higher-income households, starting with single filers making more than $75,000 and joint returns of more than $150,000
- The tax credit will go back to $2,000 for 2022
What happens if congress doesn’t save the credit?
- Lower income families could really feel a financial pinch; in some cases they are going to lose $1,600
- The credit will also revert back to yearly refunds rather than monthly payments, so they won’t just lose the extra money, but they will have to wait a year to see any credit at all
What can those families do next year if this expansion does expire?
- This expiration means some families will have to evaluate their expenses; but you can minimize the effects if you make a budget and stick to it
- It’s a fairly good time to be looking for work right now, so you might want to ask for a raise or look for a higher paying job