Democrats make full-court press on expanded child tax credit

The Biden administration and congressional Democrats are making a big push to increase awareness about the monthly child tax credit payments that are starting next month, as they also push to extend their expansion of the credit.

The administration designated Monday as child tax credit awareness day, and White House officials, lawmakers and nonprofits held various events in an effort to educate Americans about the forthcoming monthly payments.

The vast majority of eligible households will receive the monthly payments automatically, but stakeholders want to ensure that the lowest-income households not typically required to file tax returns receive the payments. 

Democrats see the monthly payments as a key way to reduce child poverty, and want to make sure that the rollout of the payments works smoothly as they seek to make the monthly payments a long-term policy. A rollout without major issues could give a boost to the efforts to extend the child tax credit expansion Biden enacted earlier this year.

“We’re asking Americans to come together to build support and awareness for this vital tax relief for families, to help us extend it for years to come, and to ensure we get all children in our nation’s low-income families signed up this year,” Biden said in a statement Monday. “If we’re able to get every family signed up, it will mean significant tax relief for America’s working families, and will help bring us even closer to cutting child poverty in half.” 

The $1.9 trillion coronavirus relief package Biden signed in March, known as the American Rescue Plan, expanded the child tax credit for 2021. One feature of that expansion was to direct the IRS to create a program for people to receive periodic advance payments of the credit from July to December, so that families receive funds in installments throughout the year rather than in a single lump-sum when they file their tax returns next year.

The relief law also increased the maximum credit amount for 2021 from $2,000 per child to $3,600 for children under age 6 and $3,000 for children ages 6 and older. And it made the credit fully available to the lowest-income families.

The Treasury Department last month announced that it will make monthly payments of the credit starting July 15. Families will receive half of the credit amount to which they are entitled for 2021 in the form of monthly payments from July to December of up to $300 per child under age 6 and up to $250 for each older child. Families will receive the other half of the credit amount to which they’re entitled when they file their tax returns next year.

The monthly payments are being made to households based on their 2019 or 2020 tax returns, and people who used last year’s non-filer tool for stimulus checks will also receive the child tax credit payments automatically. Treasury said that monthly payments will be made automatically to about 39 million households, which include about 88 percent of children in the United States. 

But a challenge facing the administration is getting payments to low-income households that have not filed tax returns in recent years.

Treasury and the IRS last week rolled out a web tool that non-filers can use to register for the monthly child tax credit payments. 

The White House, congressional Democrats and nonprofits on Monday held a number of events to spread the word about the monthly payments and the non-filer portal. Stakeholders are expected to continue their outreach efforts in the coming weeks.

Vice President Harris spoke about the child tax credit expansion and the need for non-filers to register for it during a speech Monday in Pittsburgh.

“When more families know about the relief that is included in the American Rescue Plan, when more families know about how they can get the relief, that is how we will be able to lift our children out of poverty, that is how we will lift up our nation’s middle class as well,” Harris said.

Democratic lawmakers partnered with nonprofits and advocacy groups to hold virtual and in-person events on the child tax credit on Monday. House Speaker Nancy Pelosi (D-Calif.) at a virtual event with California-based organizations said that Democrats “have a drumbeat across the country” on the topic.

Officials at nonprofits have expressed some concerns about the IRS’s form for non-filers.

The form is “not super mobile friendly,” said Laura Scherler, senior director of economic mobility at United Way Worldwide. Non-filers often have smartphones as their primary internet source, she said.

Other nonprofit officials noted that the form isn’t offered in Spanish. The White House does have a webpage with questions and answers about the credit that is available in Spanish, but the non-filer form itself is only available in English.

Sens. Michael Bennet (D-Colo.) and Sherrod Brown (D-Ohio), leading senators on child tax credit legislation, said during a virtual event Monday that they have spoken to the administration about these issues and think the IRS will work to address them.

“We’ve got to do everything we can to make sure the non-filer tool is as accessible as possible,” Bennet said.

In addition to making non-filers aware of the need to register for the payments, the IRS and other stakeholders are informing families that have filed tax returns in recent years about forthcoming automatic monthly payments so that they are not surprised by them.

“There are two buckets of outreach that’s needed,” said Roxy Caines, who works on tax credit outreach for the Center on Budget and Policy Priorities. 

The IRS is expected in the near future to roll out a second web tool that will allow families to provide the agency with information about any relevant changes of circumstances, such as the birth or adoption of a child this year, as well as to opt-out of the advance payments.

As the Biden administration and congressional Democrats work to educate people about the monthly payments, they are also pushing to extend the expansion of the child tax credit.

Supporters of cementing the credit expansion say that doing so could make a big difference for the well-being of children.

“It could do more to address child-welfare issues than anything we passed in the past 20 years,” said John Sciamanna, vice president for public policy at the Child Welfare League of America.

Biden in his American Families Plan has called for making the credit permanently available to the lowest income families, while extending other parts of the expanded credit through 2025. Many congressional Democrats have said they want to make the full expansion of the credit permanent.

Pelosi said she wasn’t sure if Democrats will be able to enact a permanent expansion because of the price tag, but said “it’s well worth the price and the value that we receive for our children.”

Republicans increased the amount of the child tax credit in their 2017 tax law, but they have raised concerns about Biden’s expansion of the credit and have raised concerns about the potential for people to commit fraud to take advantage of the new program for monthly payments.

Brown said he hoped that an extension of Democrats’ expansion of the credit will be bipartisan.

“I can’t imagine that even people that don’t much like the child tax credit … some conservative colleagues in the Senate, I can’t imagine they want to increase taxes,” he said.