Is Child Credit Still Relief Bill’s Best-Kept Secret?

Despite Outreach, Families Who Need It Most May Not Know to Sign Up

Woman working while sitting with daughter at table in house
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The IRS is aiming to spread the word about a first-of-its-kind federal tax credit for low-income parents with children at home, but the turnout at one event in Philadelphia last week may signal it’s an uphill battle.

Key Takeaways

  • The IRS is two days away from distributing the first round of new monthly child tax credit payments, but low-income families who don’t normally file taxes, and who likely need the credit the most, must sign up for it on a special website. 
  • The government has waged a publicity campaign to make people aware of the credit, but it’s unclear how effective it’s been.
  • Only 10 people attended special events in Philadelphia aimed at getting non-taxpayers to register for it.

Out of nine people who had made appointments to go to the North Broad Street office of Campaign for Working Families for free tax help Friday, none had signed up for assistance with the child tax credit, which had been promoted by the IRS as part of a special event. In fact, only 10 people sought help with the credit at the nonprofit group’s four events in June and July, said Jonathan Barnes, director of volunteer engagement at the group.

Most people shouldn’t need help, since monthly payments are scheduled to go out automatically to most eligible taxpayers starting Thursday. But the recent IRS events in Philadelphia and 11 other cities were targeting people who don’t normally file taxes—commonly due to having little or no income. Those people won’t get the payments unless they file a tax return or register with the IRS using the agency’s special online tool for non-filers. 

“Turnout wasn’t as high as expected,” Barnes said. “There’s just not enough good information out there for people to know what they’re supposed to be doing. The IRS sort of scrambled to put these events together and did not do as much targeted outreach as necessary to reach many of the non-filers who will benefit from the new child tax credit.” 

Financial Lifeline

The monthly payments of up to $300 per eligible child are part of an entirely revamped 2021 benefit that proponents say will extend a financial lifeline to millions of families, and may even cut child poverty nearly in half, by one estimate. The American Rescue Plan, the most recent pandemic relief bill, not only boosted the maximum credit per child from $2,000 to $3,600, it made the credit available to families who were previously unable to get the full amount, or in some cases, any amount, because they didn’t earn enough.

Nationwide, 51% of U.S. likely voters surveyed said they had heard little to nothing about the new credit, according to a poll conducted by Data for Progress in late May and early June. Since then, the IRS has carried out a publicity campaign that included sending 36 million form letters directly to taxpayers. President Joe Biden even designated June 21 “Child Tax Credit Awareness Day” and sent out social media videos urging parents who don’t file taxes to visit childtaxcredit.gov and sign up for the payments. 

But the Campaign for Working Families, which provides free tax preparation services, has signed up only “a handful” of people who don’t usually file taxes for the credit since it was announced, far fewer than expected, Barnes said. And while many others know it exists, he said, the information about how to sign up has confused some people. Common sticking points include which of several IRS web portals to use, how to navigate the identity verification process the site uses, and which parent claims the credit in the case of joint custody.  

Vanessa Wilson, a mother of two who works as a teacher in addition to two side jobs, went to the North Broad Street office on Friday to get help getting her latest stimulus payment. She said she was vaguely aware of the child tax credit but hadn’t realized she would likely get $250 per month for her one eligible 14-year-old until a reporter and workers there told her.

“I might quit one of my jobs,” she said. 

Opting Out

It wasn’t clear from the IRS website whether there is a deadline to register as a non-filer, and the IRS didn’t immediately respond to requests for comment on that or how many people had used the non-filer sign-up tool. At least 2 million people might need to register to receive the tax credit, according to a recent analysis from the Treasury Department.

The tax agency has created a separate web tool for those who are slated to automatically receive advance payments, but might not want them right now, particularly if their circumstances might change before next spring. The monthly payments are technically an advance on the child tax credit people normally get when they file their tax returns, and can be turned down by using the child tax credit update portal

The deadline for opting out of the first payment, coming on July 15, has passed, but taxpayers have until Aug. 2 to unenroll from the Aug. 13 payment (and later deadlines for later payments). People can also use the IRS website to see if they’re eligible for payments, already enrolled, or to provide new bank information for direct deposits.

Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.