Filing Taxes Late Could Be Especially Harmful This Year.
With the May 17 tax deadline approaching, many American families are unaware of expanded benefits they are eligible to receive that depend on punctual filing.
The expanded child tax credit, passed in the American Rescue Plan in March, will begin disbursements of $250 – $300 per child each month, totaling $3000 – $3600 starting on July 1. However, for those who stand to benefit, filing taxes on time is of critical importance.
“To determine how much money you’ll be receiving, the IRS needs to confirm your 2020 income,” said Greg Nasif, political director of Humanity Forward. “If people don’t file before the deadline, they could end up receiving less than what they’re owed.”
Qualifying families will have another opportunity to update changes to their income, filing status and the number of qualifying children, but the IRS has not provided specifics on how or when that opportunity will be available. For those in need of the extra cash, doing taxes on time would be the safer option.
Additionally, those who typically do not earn above the required threshold for filing are eligible for the expanded child tax credit, but only if they file this year.
“Folks who typically don’t have to file their taxes are the ones who stand the most to gain from the Child Benefit,” added Nasif, referring to the millions of Americans who fall below the $12,200 income threshold. “But they need to let the IRS know about their eligibility by filing this year.”
A Sizeable Opportunity Cost
With the deadline less than a week away, it’s unclear how many Americans are aware of the monthly benefits they can receive which is expected to cut child poverty in half.
According to The Hill, a group of more than 50 House members is urging the IRS to use the information it obtained from a stimulus payment-related web tool to increase outreach about two tax credits that benefit low-income families who may not be aware of their eligibility.
“The IRS has a limited-time and unique opportunity, while the information is still fresh, to conduct targeted outreach to these low-income non-filers who may be unaware of their eligibility for these important refundable tax credits,” wrote the lawmakers in a letter to the IRS.
The delegation’s letter to the IRS , a statistic which has strengthened the case to make monthly checks to parents last longer than the one year appropriated for in the American Rescue Plan.
That reality has concerned advocates for basic income and the American Families Plan alike.
For supporters of universal basic income, the child benefit represents an important step towards universal recurring payments to all citizens, as it will be experienced in the same way — monthly checks from the federal government directly to citizens — and represents the largest disbursement of direct monthly cash to a broad group of Americans since the passing of the Social Security Act of 1935.
For advocates of the American Families Plan, the policy’s effectiveness and ability to live up to its poverty-slashing projections is paramount to the push for its permanency or expansion through 2025, as President Biden laid out in his joint address to Congress.
The push for permanency has strengthened in recent weeks, with bills on both sides of the aisle in Congress demonstrating a significant amount of support that could pass the policy into law.
“We’re going to fight like hell to make sure that we make it permanent,” said Senator Michael Bennet (D-CO) in support of the Child Benefit.
Regardless of motivation for these advocates of the Child Benefit, however, the goal before May 17 remains the same: Spread the word and encourage Americans to file on time this year.