What Michigan needs to know about the July 15 Child Tax Credit payments

Many Michigan families are among those in the U.S. who are counting down the days until July 15 when they’ll receive their first automatic Child Tax Credit payment.

The payments represent a cash windfall of up to $300 per child each month for the rest of 2021.

The payments — received either through direct deposit or in the mail — are part of the largest Child Tax Credit to date, according to The White House.

Parents of children 6 to 17 years old can receive $250 for each child per month, and they’ll get $300 per month for children under 6 years old. Since this tax credit will be a temporary monthly payment, it will not count as additional income that will hinder eligibility for public assistance.

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Unclear is how many families are eligible for the payments. About 21 percent of Michigan’s population is under age 18, or about 2.16 million children, according to the U.S. Census Bureau.

The Child Tax Credit has been used since 1997, but has just recently expanded as a result of the American Rescue Plan, signed into law on March 11. 

The credit is the latest round of federal stimulus reaching individuals and families this year, as the nation recovers from the economic impact of the pandemic.  In spring, payments of up to $1,400 per person were sent to those who met income guidelines.

The goals of the latest payments are to help reduce child poverty and to help low-income and middle-class parents.

This new Child Tax Credit is expected to reduce child poverty by about 45 percent overall. according to Columbia University’s poverty center. As of 2019, Michigan had 415,329 or 19.5 percent of children ages 0 to 17 living below the poverty level, according to Kids Count Data Center.

As a way to combat childhood poverty, Gov. Gretchen Whitmer put together a Michigan Poverty Task Force proposing $1 million for next year’s budget to discover what the state must do next for this issue.

For now, Whitmer stated in a press release, she believes this Child Tax Credit could be vital to help Michigan families in need.

“(It) is a powerful tool to help us fight childhood poverty,” Whitmer said. “This is a game-changing investment that will uplift kids and families in Michigan and across the United States and is another example of how we are making a real difference in people’s lives right now.”

How to check eligibility for the Child Tax Credit

Parents will receive this credit automatically if they have filed tax returns for 2019 or 2020, or signed up with the Non-filer tool last year to get a stimulus check from the International Revenue Service (IRS). However, those who do not make enough money to file taxes may still be eligible and can check by using the Child Tax Credit Non-Filer Sign-up Tool.

If a person was required to file taxes in 2020 and did not, they can still file a return to get monthly Child Tax Credit Payments in 2021. Each child must have a Social Security number.

The amount a family qualifies for will vary by income. However, married couples with income under $150,000, families with a single parent with income under $112,500 and everyone else with income under $75,000 will qualify for the full Child Tax Credit, according to The White House.

Michigan’s median household income in 2019, the most recent year available, was $57,144.

For those who are not sure if they qualify for the Child Tax Credit, they can check using the Advance Child Tax Credit Eligibility Assistant.

Parents can check to see if they are enrolled, can unenroll from advance payments or provide updated bank account information using the Child Tax Credit Update Portal.

As payments begin July 15, the IRS has set a schedule on when families should expect to receive their monthly Child Tax Credit.

What has the American Rescue Plan Changed for the Child Tax Credit

Not only has the credit amount changed, but according to the U.S. Department of the Treasury there have been other changes to the Child Tax Credit as well.

Children 17 years old and younger are now covered compared to previous years where 16 year old children and younger were the only ones to qualify.

Periodic payments from July 1 to Dec. 31, 2021 allow families to receive assistance now instead of waiting until they file taxes. Due to these payments not starting until July, parents can claim the credit from January to June when filing 2021 income tax returns.

The credit is also fully refundable now. Due to this, low-income households can receive the full credit benefit increased by the American Rescue Plan.

In addition, low-income families residing in Puerto Rico and the U.S. Territories can receive this assistance for the first time.

The future of the Child Tax Credit

The new changes to the Child Tax Credit due to the American Rescue Plan are only set for 2021. However, President Joe Biden proposes an extension of this assistance for another five years in his American Families Plan.

As for Michigan, Whitmer encourages individuals to educate themselves and others on the Child Tax Credit so families can receive the assistance they need.

“We are asking community groups, non-profits, religious associations and education organizations to share this critical information about the federal Child Tax Credit with parents,” Whitmer said in a statement. “We have a real opportunity to make a difference in children’s welfare here in Michigan.”