The Child Tax Credit expired at the end of 2021. The most affected by this decision were the most vulnerable sections of the society, the low or the moderate-income group reports newsbreak.com. However, the monthly installments sent to families for every child qualifying for the payout were heaven-sent aid. It helped families bear the brunt of the economic hardship precipitated by the COVID-19 pandemic.
Child Tax Credit Aid-Helped Families Bear The Brunt Of Pandemic Economic Collapse
Many talks have been in the air of extending the child tax credits for another year. However, lawmakers disagreed, and eventually, the particular aid program was left to end. However, the economy is still not on track; surging inflation is the highest in forty years. Prices of essential commodities have skyrocketed. The sudden end of the Child Tax Credit checks has again pushed the most vulnerable section of the society into dire straits. Recent data has shown that low-income families struggle to meet their basic needs in the absence of the child tax credit money.
However, there is some good news. Discussions are on for a new monthly payment coming for families with children. A bill is being created in this direction, but it is still in its infancy stage. The final fate of the bill will depend upon the lawmakers, who will have to find common ground to pass this bill. In addition, there is some Child Tax Credit money left that families have not claimed, and it amounts to a whopping $8,000 this year.
$8,000 Maximum Credit Could Be Yours
Parents can benefit from an $8,000 maximum credit claimed on their taxes for childcare and similar expenses. It is a part of President Joe Biden’s American Rescue Plan. Parents can claim a maximum of 50% of their childcare expenses for 2021, up to a maximum of $8,000. Earlier parents were given a credit of 35% of these expenses and an upper limit of $2,100 for childcare expenses and $6,000 for two children.
Per a statement from the IRS, “The child and dependent care tax credit is a credit allowed for a percentage of work-related expenses that a taxpayer incurs for the care of qualifying persons to enable the taxpayer to work or look for work.”
Therefore households with kids or dependents staying in daycare or other types of qualified care can claim a few extra thousand dollars this year on their tax returns.
Per the IRS guidelines, the child must be under 13 years; the partner is incapable of self-care or A dependent who is incapable of self-care