Sanders County Ledger - Your Best Source For Sanders County News

In the same month we celebrate our nation’s Declaration of Independence, this year we can also celebrate an amazing 50% reduction — at least temporarily — of childhood poverty. In Montana, 15% of our children live in poverty. On July 15, the federal government distributed $15 billion in the first of six monthly payments to the families of almost 60 million American children. This economic transformation was made possible by expansion of the Child Tax Credit in President Biden’s congressionally approved American Rescue Plan.

Familys' tax credits increased from $2,000 to $3,600 per year for each child under age 6. For each child ages 6 to 16, the credit increased from $2,000 to $3,000 per child. Seventeen-year-olds are now eligible for a $3,000 credit. The program is known as the Advance Child Care Credit since one-half of an eligible family’s credit will be paid monthly from July through December, and the remainder of the credit can be claimed on your 2021 tax return during the 2022 tax filing season.

The median household income in Montana is $55,000 (2019). The maximum credit is available to taxpayers with a modified adjusted gross income of:

• $75,000 or less for single filers and married persons filing separate returns,

• $112,500 or less for heads of household, and

• $150,000 or less for married couples filing a joint return and qualifying widows and widowers.

There are some criteria for the tax credit recipient (a home, even a shelter, where you regularly live in one state or the District of Columbia) and the qualifying child (not yet 18 and a dependent). If the IRS has processed your 2019 or 2020 tax returns, you will receive a direct deposit into your bank account (labeled “CHILDCTC”) or a mailed check. Even if you didn’t file tax returns for those years but did sign up for last year’s federal Economic Impact Payments, you should automatically receive the monthly tax credit payments.

If you did not file a tax return for 2019 or 2020 and did not use the IRS Non-filers tool last year to register for Economic Impact Payments, you can use the Child Tax Credit Non-filer Sign-up tool to register for monthly payments. That online tool is available at http://www.irs.gov.

Starting in July, the average monthly amount paid to each eligible American family was $423. In Montana, the families of almost 200,000 children received an average payment of $457. These payments thus brought $50 million into the state’s economy. This enhanced child tax credit program, which is doing so much to reduce poverty, ends this year without additional action by Congress. Urge your senators and representative to extend this critical program!

Mindy Ferrell, Trout Creek, Sanders County Democrats Chairperson