In Blog: Factually Speaking, Tax and Budget, Tax Policy

Since the IRS began distributing advance Child Tax Credits in July, over one million Michigan households with children are receiving average monthly payments of $443 to meet household needs – whether that means paying for food and rent or saving for college. 

The changes to the Child Tax Credit have already been transformative – the U.S. Treasury estimates over 26 million children in families with low incomes nationwide will receive this expanded credit, many of whom may not have received the full benefit in the past because they earned too little. 

Rapid data are already giving us an idea just how important this credit is for families. Based on Census Bureau Household Pulse Survey Data, food insecurity in households with children has fallen in the weeks since July 15, when credits first began appearing in bank accounts. As children began returning to school in August, families used the credit for clothing and school supplies in addition to food and household bills.

Source: Census Bureau Household Pulse Surveys, week 36

Yet while most tax filers may have seen credits arrive automatically, approximately 3% of children in Michigan are missing out. 

Nearly 65,000 Michigan children have not yet received the Child Tax Credit payments for which they are eligible, likely because their families may not have been required to file taxes in the last two years. This includes children throughout the state, including approximately 16,000 children in Wayne County and nearly 9,000 in Oakland County. And although fewer eligible children live in Northern Michigan overall, the share of children not yet claimed for the Child Tax Credit is highest in Keweenaw (5.9%), Lake (4.8%), and Houghton (4.7%) counties.

The culprit of this gap is that newly eligible families may not have enough income to file a tax return. Families who did not file a tax return in 2019 or 2020 will need to provide updated information to start receiving credits. Families can sign up through GetCTC to claim the Child Tax Credit as well as the three economic stimulus payments disbursed since March 2020, which can add up to an additional $3,200 plus $2,500 per dependent child on top of the Child Tax Credit. If filing a state return, Michigan families may also find they are eligible for state credits, like the Michigan EITC (Earned Income Tax Credit) or the Homestead Property Tax Credit.

Kids Count data tell us 18% of Michigan children are living in poverty and 8% are living in extreme poverty. The benefits of reducing child poverty extend long into adulthood – from improving rates of college attainment and reducing mortality and crime to increasing employment. Tax credits are an effective tool to combat poverty when accessible. For too long, the Child Tax Credit has failed to lift up families most in need, many of whom will need support beyond the December deadline. 

The Child Tax Credit recognizes that families need support to offset the rising costs of raising children, and December is simply too soon to cut off support for families who are still recovering from the financial hardships brought on by the pandemic. Extending the credit will help all families succeed, whether that means helping families meet basic needs like food and bills or providing support for child care and enrichment activities. An expansion of the Child Tax Credit remains a must as America works to Build Back Better. 

For more assistance on whether you qualify for the expanded Child Tax Credit, you can reach out to:

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