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Expanded Child Tax Credit: A Game-Changer for Ohio Families

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The expanded Child Tax Credit for 2021 is $3,600 for a child under age six. (Pixabay)
The expanded Child Tax Credit for 2021 is $3,600 for a child under age six. (Pixabay)
 By Mary Schuermann Kuhlman - Producer, Contact
May 24, 2021

COLUMBUS, Ohio - A historic expansion of the federal Child Tax Credit could be a game-changer for Ohio families.

According to state data, nearly 10% of Ohio families were living in poverty prior to the pandemic.

The American Rescue Plan expands the credit for the 2021 tax year to an additional $1,000 for children ages six to 17, and $1,600 for kids younger than six. Families will receive half of the credit in advance, as monthly payments this year, and the remainder when they file their taxes next year.

Elisa Minoff, senior policy analyst with the Center for the Study of Social Policy, offered an example of payments that a family with a two-year-old and a seven-year-old would receive.

"They should be getting $550 a month starting in July, running through December," said Minoff. "And then, they'll get the rest of their expected Child Tax Credit as a lump-sum payment, $3300, in 2022."

The Internal Revenue Service begins sending the payments July 15 to eligible families.

The expanded tax credit phases out for single-parent households earning more than $75,000 annually, and $150,000 for married couples.

In the U.S. Census Bureau's Household Pulse Survey for the week ending May 10, nearly 97,000 households with children reported having trouble paying their usual household expenses.

Another Biden administration proposal, the American Families Plan, would make the expanded Child Tax Credit available for the next four years.

Research from Columbia University's Center on Poverty and Social Policy indicates if that happens - coupled with other tax credits in the plan - it would cut child poverty nearly in half.

Minoff thinks the Child Tax Credit should continue after 2025.

"So, this can do a lot to support children and families in the United States," said Minoff. "We just need to make sure that the policy really works as it should, and that families get it who need it, and that it's made permanent."

The expanded Child Tax Credit is also refundable, meaning eligible families with no earned income can claim the credit.

Meantime, critics of the $1.8 trillion American Families Plan don't agree with the corporate tax increases it includes and say it would only add to the national debt.

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