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Tax nonfilers have 3 weeks to sign up for temporary child tax credit payments

Expanded monthly tax credit, while temporary, aims to help families struggling since the pandemic. But advocates fear few families who need it most know how to claim it

Photo illustration by Michelle Budge

The federal government is paying half the child tax credit for 2021 through monthly payments from July through the end of 2021 in hopes of helping families who’ve been financially strapped in the pandemic.

But officials and advocates for low-income families fear those who most need the help won’t find out how to receive it in time to get the monthly payments. Instead, they will end up waiting until tax season to claim it, if it’s claimed at all. The biggest worry is people who earn too little to file taxes may not know how to claim the credit.

Most folks who qualified for the child tax credit on their 2019 or 2020 taxes — or who signed up specifically for a stimulus payment because they didn’t have to pay taxes — won’t have to do anything unless their address or bank has changed. For others, the Treasury Department and the Internal Revenue Service put online this week the Nonfiler sign-up tool.

But to get the six monthly payments in advance of tax season, nonfilers have roughly three weeks to declare their eligibility.

The online portal can also be used to claim any of the three rounds of pandemic-related stimulus payments that eligible families didn’t receive.

Parents will receive $300 a month for eligible children under age 6 and $250 a month for children ages 6 to 17. A tax cut-eligible child must be under age 18 at the end of 2021 and have a valid Social Security number. Households must also meet income-eligibility limits.

“The online portal will help immensely as local organizations reach out to families who will depend on these monthly payments. We are worried that a lot of folks will miss out, particularly low-income families who can’t afford or don’t have access to the internet. That’s why we’re seeing support for extending the monthly payments growing in Congress. This is a revolutionary policy, but it’s going to take longer than six months to have the impact it should,” said Chris Maher, deputy spokesman for Humanity Forward.

According to Humanity Forward, “virtually all children below the poverty line are eligible for the payments and if the implementation of the benefit is successful, it is expected to cut poverty by at least 45%, according to a Columbia University Study.”

But polls show that few people know about the policy or how it could affect them. A poll by progressive think tank Data for Progress found just over half of Americans know very little or nothing at all about the child tax credit.

“Those struggling to keep up with their expenses are likely not keeping up to date with the newest changes in tax policy,” said Greg Nasif, political director of Humanity Forward, which bills itself as “dedicated to building bipartisan coalitions to advance the economic interests and policy priorities of the American people.”

Nasif added, “Giving families three weeks to learn about this benefit, how to file with the IRS and then to get it done is worrying, to say the least.”

The Hill reported that more than 50 House members signed a letter encouraging Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig to reach eligible families by using information collected online through a portal created specifically to help those who don’t file taxes get their stimulus money.

“The IRS has a limited-time and unique opportunity, while the information is still fresh, to conduct targeted outreach to these low-income nonfilers who may be unaware of their eligibility for these important refundable tax credits,” the lawmakers wrote.

Advocates hope families will use the expanded child credit and pressure Congress to make the changes permanent. But they concede lack of awareness may jeopardize that, said Humanity Forward’s news release.

The IRS worked with Intuit and the Free File Alliance to develop the special tool for nonfilers to claim the monthly payments. Those payments will be made by direct deposit where possible. The payment date each month falls on the 15th, except Aug. 13, since the 15th is a Sunday.