With few payments left, some Minnesota parents hope expanded child tax credit is continued

For Brihanna Sims and her 7-year-old daughter, the monthly $250 payments that started showing up in her bank account in July have meant stability and piano lessons.

The Osseo Area Schools bus driver said the expanded federal child tax credit has allowed her daughter to participate in extracurricular activities for the first time. "You don't want your kid to miss out," Sims said. "Having to say no because we just don't have the money, it hurts."

The extra money also helped cover their rent when she couldn't scrape together enough money in the lull between summer — when changes due to COVID meant she only got a third of her usual work hours — and the start of school.

"Now that I have this child tax credit coming monthly and it's something I can count on, like I count on my paycheck," she said, "I can budget accordingly and then I can still, at the end of the month, have a little breathing room."

Sims hopes Congress will make the changes to the child tax credit permanent. The pandemic stimulus package passed earlier this year boosted the size of the credit and made it available to people who previously were not eligible.

And from July through December, families that usually receive the full payment when they file their tax return are instead getting up to half of the dollars in monthly $250 or $300 checks — with the latest round landing in bank accounts Friday.

President Joe Biden proposed continuing the current version of the child tax credit through 2025 as part of his sweeping $3.5 trillion social safety net and climate proposal. But it is one of many family-focused provisions that face an uncertain future in Congress, where Democrats are trying to reach a deal before the end of October on a pared-down version of what's called the Build Back Better Act.

Democrats recently suggested the bill could end up closer to $2 trillion, and it's not yet clear which measures will make the cut.

"When we talk in the Build Back Better budget bill about lowering taxes for Americans, part of that is exactly what we're discussing today, this child tax credit, which effectively lowers taxes for millions of Americans and makes it possible to lift people who are really struggling with low incomes … out of poverty," said U.S. Sen. Tina Smith at a news conference with Sims and other parents this week. "So I am very confident that this will be included in the final bills that we pass in the coming, I'll just say coming weeks."

Smith said the current version fixes a "deep flaw in the old child tax credit" where people who make very little or no income did not qualify for the payments because they didn't file taxes for the benefit to be credited against.

But there have been continued disputes over whether the dollars discourage parents from working, and Sen. Joe Manchin, the moderate Democrat from West Virginia who wields significant leverage in the divided Senate, has suggested there should be a work requirement tied to the credit.

While Congress faces off over the future of the tax credit, some of the poorest Americans are not benefiting from the payments that they are, at least right now, eligible to receive.

Families that have not been required to file a tax return — generally a head of household earning less than $18,650 or married couples making less than $24,800 in 2020 — need to sign up to claim the monthly child tax credit payments.

In Minnesota, more than 59,000 children were dependents of people who did not make enough money to be required to file taxes, according to Minnesota Department of Revenue researchers who reviewed data from 2018.

An IRS spokesman said the agency does not have an estimate of the number of non-filing families that are not getting the payments. But the left-leaning Center on Budget and Policy Priorities estimated in an August report that 4 million or more children in low-income families across the country could miss out on $13 billion or more in payments that were expanded through the American Rescue Plan.

"The Rescue Plan's changes to the Child Tax Credit are estimated to reduce the number of children in poverty by more than 40 percent," the Center's report stated. "To reach that goal, government agencies, community-based organizations, and advocates will need to conduct aggressive outreach and provide hands-on assistance to the lowest-income families with children, whom the IRS traditionally has had a hard time reaching."

The IRS has held in-person and virtual events with community organizations to let people know about the advanced child tax credits, said spokesman Raphael Tulino, but he said he's not aware of any money from Congress specifically designated for the IRS to do outreach on the topic.

A spokesman for the Minnesota Revenue Department said they have shared some of the IRS' social media posts encouraging people to sign up for the credit but have not done anything else.

Local advocacy groups have been urging people to take advantage of the payments. The Children's Defense Fund-Minnesota has given informational fliers to some food shelves, where workers have been handing them out to parents recently to try to make sure they are aware of the benefit.

"The lowest-income families that didn't qualify just because they didn't have enough money coming in, or no money coming in, that's a whole new group of people coming in who are obviously the most important ones, arguably, to be getting this kind of support. And the most challenging to reach," said Debra Fitzpatrick, policy and research director with the Children's Defense Fund-Minnesota.

People who have not filed a tax return can sign up to get the monthly payments through the IRS' non-filer sign-up tool until Friday. After that, they can sign up through Nov. 15 at GetCTC.org, a website that Code for America created in partnership with the federal government. The last monthly payment is Dec. 15, and parents can claim the rest of the money when they file their 2021 tax returns.