“TAX hesitancy” is gripping many American parents as over 4million children didn’t get their child tax credit payment.
Specialists have suggested that some parents will not be cashing in on their money out of fear that giving their personal financial information over could hurt them.
Many Americans are missing out on the credit[/caption]
Most taxpayers receive the credit automatically, however, some low-income families are missing out on the checks due to not usually filing a tax return.
The IRS has made it simple for Americans who have not filed before to do so.
However, Dorian Warren, the co-president of Community Change, a group focusing on low-income minorities and women, suggest that tax hesitancy will stop people from signing up.
He said that some families will be scared of hitting a benefit “cliff,” which could mean that they become ineligible for other aid they receive.
Warren said Americans may also feel shame filing their tax return, if they have not done so in the past.
“Objectively, there’s no validity to the benefit cliff or benefit loss,” Warren said.
“There’s so much money,” he went on to say about the child tax credit. “It’s just sitting there on the table.”
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More than two million children do not appear to have been claimed by a parent on a tax return while another 1.6million are born through Medicaid, CNBC reports.
And, there are those who do not show up on 2020 or 2019 tax returns.
Elaine Maag, of the Urban-Brookings Tax Policy Center, told the outlet: “We don’t actually know how many children there are outside the tax system.
“Nobody knows what the target number is.”
Some low-income earners think that they are not eligible to claim child tax credits if they do not file a tax return.
In America, you don’t have to file a tax return if you earn less than $12,200 a year as a single taxpayer or $24,400 as a married couple filing jointly.
Low-income earners just have to provide the IRS with their name, address, and social security number.
White House officials fear that some of America’s poorest families will miss out on child tax credit payments because they are reluctant to disclose information to the IRS.
The non-filer application can only be completed in English raising concerns that native Spanish speakers in regions such as El Paso may miss out.
But, the IRS provided guidance in Spanish on the non-filer portal, according to El Paso Matters.
The next set of child tax credit payments will be deposited on August 13[/caption]
Meanwhile, others are worried that they will have to pay the cash back.
The child tax credit is an early payment of the estimated cash for 2021.
This means that the money is heavily dependent on 2020 or 2019 income and household size.
Therefore, if either salary or household size has changed in the last two years, some parents could end up owing money when they file tax returns.
But, heads of households who make $50,000 or less, or joint filers with incomes of $60,000 will not need to repay an excess.
Families are reportedly concerned about making a mistake when they file the application.
There will be an additional five payments worth up to $300 sent to cash-strapped families across America before the end of the year.
The next payment will be deposited on August 13 and should arrive in bank accounts within a few days.
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Families with kids up to the age of six can claim $300 per child.
Meanwhile, the amount is $250 per child for parents with kids aged six-17.
Households can choose to opt-out of receiving monthly payments if they prefer to do so but details must be updated by August 2.
Source: The Sun
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