Parents and lower-income Americans should expect thousands more on their tax returns this year — but the refunds won't come until March even if you file early
- Families can expect to receive up to $1,800 per child starting in March from the child tax credit.
- Lower-income families are also eligible to get extra cash through the Earned Income Tax credit.
The expanded child tax credit expired at the end of last year. Though families are no longer receiving direct payments, many still have a hefty sum they can receive from the IRS starting in a month.
Eligible parents will still be able to claim more money from their child tax credits. The expansion allowed families to receive up to $3,600 total for those with children five or under, and only half of the credit went out in monthly payments.
That means that some families will receive up to an additional $1,800 come refund time. Parents who received monthly checks should've gotten letter 6149 from the IRS, which tells them how much they've already received of their child tax credit — which they'll then reconcile on their taxes.
Millions of adults are also newly eligible for the Earned Income Tax Credit (EITC), a tax credit that primarily targets lower and medium-income Americans. This year, the IRS again expanded eligibility for the EITC, allowing young childless adults to claim the break that can go up to nearly $7,000.
However, the IRS is cautioning taxpayers that, by law, they can't issue refunds for EITC or the Additional Child Tax Credit (ACTC) before mid-February. The agency said it expects the earliest those refunds will arrive is March 1 for filers who chose direct deposits and have "no other issues" with their returns.
Some filers with such issues — such as needing to file an amended return — are still waiting on refunds from their 2020 returns. As Insider previously reported, those delays have meant some Americans are struggling to pay for childcare, groceries, and even their homes. Many filers who still haven't had their 2020 refunds also did not receive any advance child tax credit payments, meaning that they're owed thousands come tax season this year.
Democrats overhauled the child tax benefit as part of the stimulus law last year, boosting its sum and transforming it into a universal child allowance. The expanded child tax credit expired in December after negotiations over the Democrats' big spending bill fell apart.
The program encountered resistance from Sen. Joe Manchin of West Virginia, who argued the program was too costly and could dissuade families from working. He came out against the House-approved plan in December and there's been little movement on a smaller bill since then.
A group of Democrats that included Sens. Michael Bennet of Colorado and Sherrod Brown of Ohio said Tuesday they're still trying to convince Manchin about the benefits of the program. Manchin, however, said he wasn't involved in any formal discussions about the program or reviving other parts of Biden's stalled economic agenda.