For millions of parents across the country, the New Year began without a monthly deposit from the expanded child tax credit, a several-hundred-dollar deposit that parents had relied on since July, when the expansion took effect.
“That was the only income I received for the last six months,” Tierra Hal, a single mother of two daughters, ages 4 and 2, said of the $600 monthly payment she has received since July. "Used it to pay my car payment and bills".
Hal, 25, of Ranson, West Virginia, said he has struggled to find work due to a lack of child care options for his daughters, a struggle that has been amplified by the coronavirus pandemic.
"It's hard for a single mom to find a job in general, and then you add COVID to that," she said. "It's hard to find someone to take care of my children while I work."
More than 300 miles away in Milton, West Virginia, Lara Lawson, a single mother of a 9-year-old girl, said she too is worried about her family's future without the monthly child tax credit payment.
"I'm definitely worried about making ends meet without that extra push each month," he said. "The bill for the purchase is not going to change. Things are not going to start getting cheaper."
Lawson has a full-time job as director of community impact at the United Way of the River Cities, a position where she says she sees countless families who rely on child tax credit payments for their support.
"It's hard to necessarily see all the big benefits that happened, but when it wears off, it will become apparent," Lawson said. "I hope [lawmakers] connect it to the real-life consequence of people having an easier time paying the bills, and now we're going to have a hard time."
"Through this pandemic, I feel like we've really been neglected in terms of economic assistance," he said.
Larson and Hal are just two of an estimated 35 million families in the US who, since July, have received monthly payments of up to $300 for each child under the age of 5, as well as up to $250 for each child ages 6 to 17. years under the expanded child tax credit plan, according to the Internal Revenue Service.
According to the Census Bureau, families have primarily spent the money on school and childcare and on essential items like food, rent, mortgage and utilities.
In West Virginia alone, the expiration of the child tax credit expansion has put 50,000 children at risk of falling into poverty, according to the West Virginia Budget and Policy Center, a nonpartisan policy research organization.
The fate of extending the expansion of the child tax credit in 2022 rests with the US Senate, which has yet to vote on the Build Back Better Act, legislation passed by the House of Representatives in November and includes an extension of one year of monthly payments.
Without the expansion, the child tax credit is returning to its previous levels: a maximum credit of $2,000 per child under the age of 17 that is phased in with earned income for low-income households and is received largely in the time of filing taxes, rather than in monthly IRS payments, according to Erica York, an economist at the Tax Foundation's Center for Federal Fiscal Policy.
What parents need to know to get the remaining child tax credit money
Parents who received monthly child tax credit payments in the last year will get the remaining half of their money when they file their taxes.
Parents who opted out of monthly payments will receive their full child tax credit payment with their 2021 federal tax return.
The IRS has sent letters, called Letter 6419, that tell parents how much they received in advance monthly payments and the number of qualifying children the IRS used to set their monthly payments, according to York.
"You'll want to wait to file your taxes until you get this letter from the IRS, because you'll be using that information to file your taxes," he said. "And if they're a married couple, they'll get a letter for each spouse, so keep an eye out for possibly two letters."
Once parents have the letter, York recommends that they check the IRS total against their own records of advance payments of the child tax credit they received to make sure the numbers match.
Parents can also verify payments through the Child Tax Credit Update portal on the IRS website.
"If someone received too much of an advance payment, more than they qualify for, there are protections based on income levels," York said. "So if someone earns below a certain income level, they're essentially shielded from having to pay, but if they're a higher-income household, they may have to pay if they were overpaid."
If a parent gave birth in 2021 and qualifies for the child tax credit but didn't receive advance payments, they can claim the child on their tax return and then receive the payment on their refund, according to York.
He also noted that low-income families who don't normally file taxes will need to do so this year to receive the remaining payment of the child tax credit.
To get your tax refund as quickly as possible, York recommends that parents file their taxes electronically and provide bank information so their refund can be sent via direct deposit.
She also recommends that parents triple-check that the information they enter is accurate and matches what the IRS has on file, because errors will cause delays.
"And if for any reason what the IRS has on file doesn't match what a person thinks they received, they should contact a tax preparer for advice on what to do as well," York explained, adding that the IRS has a Frequently Asked Questions. Questions page on their website to help.