This month, many families with children began to receive money as part of the child tax credit plan, but an Illinois professor says it may not be beneficial for everyone.
For 2021, the credit increases to $3,000 from $2,000 per child under the age of 17 and gives an additional $600 benefit for children under the age of 6.
That is for families with 2020 or 2019 adjusted gross income of less than $75,000 for single parents and $150,000 for a married couple filing jointly, and ends for individuals earning $95,000 and married couples filing jointly making $170,000, though they would still be eligible for the regular child tax credit.
That can come in monthly payments, $250 per month for children between the ages of 6 and 17 and $300 per month for those under the age of 6, or can be claimed as a lump sum on 2021 taxes.
Northern Illinois University Professor of Accountancy Suzanne Youngberg said some families may want to say no to the remaining payments and instead claim the entire credit when they file their 2021 taxes next year.
“When you have an increase of income in 2021, it could make you ineligible for the child tax credit and then you are required to pay it back,” Youngberg said. “If you typically owe taxes each year, if you are getting half of that credit now, that means you are going to have a larger tax bill in 2022.”
Democratic lawmakers are pushing to make the tax credit permanent. President Joe Biden has suggested at least expanding it for a few more years so that it doesn’t abruptly end in 2022.
Illinois Sen. Dick Durbin said the new benefit is expected to bring thousands of children out of poverty.
“Of all the things we do in Washington, here is something real,” Durbin said earlier this month. “Families see real money. Money they can use to pay rent and utilities.”
Illinois Congressman Rodney Davis said he hopes the payments don’t resemble Illinois’ fraud-riddled unemployment system.
“How are they going to ensure that those regular payments get into the hands of the families that need it the most,” Davis said. “You don’t have to look much further than the state of Illinois. We’re still seeing instances of fraudulent activity, fraudulent unemployment claims that probably and likely cost the state hundreds of millions if not billions of dollars.”
***Report Courtesy of the Illinois Radio Network***
