Most Iowa residents with children will begin to see checks arriving in their bank accounts and mailboxes as soon as an expanded child tax credit goes into effect.
U.S. Representative Cindy Axne spoke Thursday morning at Grace Preschool in Des Moines to tout the advantage, which President Joe Biden signed in March as part of the U.S. bailout, the latest COVID-19 stimulus to the federal government.
âI have seen the burdens that weigh on working families in Iowa when it comes to raising children,â said Axne, a Democrat. “And what’s going to happen is this child tax credit is going to support 85% of families in Iowa. It’s huge.”
Federal action increases the existing child tax credit from $ 2,000 to $ 3,600 for children under 6 and to $ 3,000 for children under 18.
Instead of paying the credit as a lump sum after a person files their tax return, the federal government will begin paying the money to qualifying families in monthly installments starting July 15.
Jason Burkhiser Reynolds, whose 3 and 5-year-olds attended Grace Preschool, said the money would help his family pay for car expenses so he can get the kids to school and get them started to save for college.
âIt’s really just an opportunity to take that burden off a little bit each month to help support our children for the future,â he said.
While the expanded tax credit is currently set to expire after December, Axne said she was in favor of making it permanent. She said she also hopes to see child care support included in infrastructure legislation that Congress is considering.
Who is eligible for the child tax credit? And how much is it?
Iowans with children are eligible for the Child Tax Credit if their household income is less than $ 112,500 for a single filer or less than $ 150,000 for a married couple filing jointly.
Axne said more than four in five Iowa households with children will be eligible to receive the tax credit. This represents approximately 193,000 families and approximately 647,000 children in Iowa.
Families will receive payments of $ 300 per month for children aged 0-5 and $ 250 per month for children aged 6-17.
Recipients of the tax credit will receive the second half of the funds upon filing their 2021 tax return.
The average tax credit benefit will be around $ 2,800 over the year, according to an estimate provided by Axne’s office. The expansion is expected to lift more than 21,000 Iowa children out of poverty, according to the estimate.
The tax credit is now fully refundable, which means that if families owe less in income taxes than the amount they receive from the child tax credit, they will receive payment for the difference, according to a White House fact sheet.
What do I need to do to register?
Iowans who paid taxes last year or signed up for a stimulus check through the IRS should receive the tax credit automatically.
Those who have not filed tax returns in 2019 or 2020 and have not received a check from any of the federal COVID-19 stimulus package rounds can apply to childtaxcredit.gov register.