AUGUSTA — President Joe Biden declared Monday “Child Tax Credit Awareness Day.” The goal is to bring attention to changes in the Child Tax Credit, approved in part of the American Rescue Plan Act.
“What’s important about some of these changes is that it targets relief to children at the very bottom of the socioeconomic ladder,” said Ann Danforth, the policy advocate for Maine Equal Justice.
“While before the Child Tax Credit was very beneficial, it was not reaching many of the people that needed it most,” she said.
Congress increased the amount of credit for this year from $2,000 per child to $3,600 per child for those under 6 years old, and $3,000 dollars for children between 6 and 17 years old.
Families who already filed 2019 or 2020 taxes will automatically receive the payments in July.
With this, families of nearly 230,000 Maine children will benefit, meaning this will help nine out of every 10 kids.
“Those critical years of brain development under the age of 6 and even on up through the teenage years are vital to the long-term prospects of those kids,” said Garrett Martin, executive director of the Maine Center for Economic Policy.
Martin said these types of programs are linked to improving health outcomes, higher math and reading scores, less use of drugs and alcohol and higher college entrance rates.
“For instance, if you boost the household income that’s making $25,000 or less a year by $3,000 when the kid is under the age of 5, the lifetime earnings potential for that kid ends up going up 17 to 18 percent,” Martin said.
For the first time, families can receive some of their CTC on a monthly basis as opposed to once a year when they file taxes.
“This really gives people the power to put resources where they’re needed,” Danforth said. “Whether that’s buying glasses for their kid, or putting gas in the car so that mom and dad can get to work or bring a kid to a doctor’s appointment.”
Benefits will expire in 2022 unless it’s made permanent.
There is a new online portal to sign up and manage payments. More information on this credit can be found at childtaxcredit.gov.