Child poverty fell significantly last year following the expansion of the child tax credit. The impact of this federal child tax credit would have been better if all eligible families had obtained this credit.
A recent audit by the Treasury Inspector General for Tax Administration found that millions of eligible families were not receiving the monthly federal child tax credit.
Millions Missed This Federal Child Tax Credit
On Tuesday, an audit report from the Treasury Inspector General of the Tax Administration noted that the Internal Revenue Service (IRS) failed to send $3.7 billion in monthly child tax credits to about 4.1 million eligible taxpayers last year.
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Not only did the agency not send payments to eligible families, but it also sent payments to millions of ineligible taxpayers. About 1.5 million taxpayers, who were not eligible for this federal child tax credit, got more than $1.1 billion in the form of the child tax credit, according to the report. audit.
Additionally, the report also found instances of errors related to incorrect bank account information. Despite the mistakes, expanding the child tax credit has proven to be a lifeline for millions of families. According to data from the US Census Bureau, expanded credit has helped reduce child poverty by more than 40% between 2020 and 2021.
The agency sent approximately 217 million payments totaling $93.5 billion in December 2021. The audit report covered approximately 179 million payments the agency sent between July and November 2021, totaling more than $76.7 billion.
Expanded child tax credit: problems were expected
Last year’s expanded child tax credit was a temporary improvement payment, and it was part of the $1.9 trillion US bailout bill, which was approved in March 2021. The expanded child tax credit increased the amount of the credit to $3,600 for a child up to age 6, and up to $3,000 for a child aged 6 to 17.
In addition, the credit has been made fully refundable to ensure it covers more low-income parents. Additionally, half of the credit amount was sent in monthly installments from July to December, and parents were allowed to claim the other half when they filed their 2021 taxes this year.
Despite these significant changes to the CTC, the IRS had about four months to set up the system to send the payments. Thus, some errors were expected. Even the inspector general’s office admitted that it was a “significant undertaking” to set up the monthly payment system in such a short time.
If you’re one of those who haven’t yet received the federal child tax credit despite qualifying, the good news is that you may still be able to claim it.
You can visit GetCTC.org, which is a Code for America website. This website offers a simple form that people who don’t typically file taxes can use to claim their child tax credit and other stimulus payments. The online form is available until November 15.
