Child Tax Credit

THE CHILD TAX CREDIT EXPANSION

As the superintendent of Denver Public Schools, Michael Bennet saw every day how growing up in poverty shapes a child’s future in ways that are deeply unfair. That’s why Michael has been a tireless advocate for expanding the Child Tax Credit (CTC) for several years. 

In 2017, Michael introduced the American Family Act with U.S. Senator Sherrod Brown (D-Ohio) to overhaul the existing CTC and create a new $300 per-month per-child credit for children under 6 years of age and a $250 per-month per-child credit for children 6 to 17 years of age, and for the first time, making the credit fully refundable, and delivering payments on a monthly basis.

In March 2021, President Joe Biden signed into law a one-year expansion of the CTC, based on Bennet’s American Family Act, in the American Rescue Plan Act.  This expansion will cut child poverty in nearly half nationwide this year and benefit nearly 90 percent of Colorado children. 

In his American Families Plan announced in April 2021, President Biden proposed permanent full refundability of the CTC, as well as extending the expanded CTC value and monthly payments through 2025. The President also committed to working with Congress to make the expanded CTC permanent. 

Michael continues to work with the administration and his colleagues in Congress to ensure any final recovery plan includes making the entire CTC expansion permanent.

  • How Does It Work?

    • In March 2021, President Biden signed into law the American Rescue Plan Act, which included an expanded CTC that will be in place for one year. This legislation expands the CTC in three primary ways for tax year 2021:

     

    1. It increases the credit’s value to $3,600 per child age 0 to 5 and $3,000 per child age 6 and older, and expands eligibility to families with children age 17.
     
    2. It makes the CTC fully refundable and eliminates its minimum earnings requirement. Previously, if you owed little or no federal income tax, you were unable to get the full (or any) credit. This one-year expansion means that all low- and middle-income families who were previously left out can get the credit, benefitting 90% of America’s kids. 
     
    3. Previously, a family would receive the credit once a year. Now, families will receive the credit in advance periodic payments — starting on July 15, 2021.
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  • What Does It Mean For Your Family?

    • You may qualify for the full CTC if:

     

      • You have at least one child age 17 or younger, and 

     

      • You are a single individual earning $75,000 per year or less, a head of household earning $112,500 or less, or a married couple earning a combined $150,000 or less.

     

    • You may qualify for a portion of the CTC if: 

     

      • You have at least one child age 17 or younger, and 

     

      • You are a single individual or head of household earning somewhat more than $200,000 or a married couple earning somewhat more than a combined $400,000.  (The exact income cut-offs depend on how many qualifying children you have.)

     

    • If you qualify for the credit, you may receive monthly payments starting as early as July 15, 2021. 

     

    • The IRS will determine whether you qualify based on your 2020 tax return (or if you have not yet filed, your 2019 return). Most taxpayers will automatically receive their payments based on information the IRS already has on file. 

     

    • If you are typically a non-filer, you should file a 2020 tax return to receive the benefit. You can do that here.

     

    • The IRS has developed an online portal where you can inform the IRS of any changes since you last filed taxes, such as your number of qualifying children.

     

    • If you are a recipient of other family benefits, such as SNAP, Medicaid, WIC, or ACA subsidies, your benefits will not be affected by your Child Tax Credit payments. 
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Cutting Child Poverty In Half

  • These changes will lift nearly 10 million kids above or closer to the poverty line, cut childhood poverty in America nearly in half, and reduce racial disparities. The expansion would:

    • Cut poverty for Black children by 52%

    • Lift 4.1 million Latino and Latina kids above or closer to the poverty line

      • Cut poverty for Native American kids by 61%

      • Lift 441,000 Asian American kids above or closer to the poverty line.

    • In Colorado, the expanded CTC will lift 57,000 kids out of poverty and benefit more than 1 million kids statewide, including nearly 350,000 kids who have been left out of the full existing credit.

    • The CTC expansion will benefit 96% of families with kids—including more than 96% of families with kids in Colorado—and pump an additional $1.5 billion each year into Colorado’s economy.

    • 94% of kids living in rural areas will benefit, including 93% of kids in Colorado’s rural communities.

    Resources to help you claim the expanded CTC

    • Use this calculator to see how the CTC expansion will affect your family. 

    Hear From Coloradans

    Ahead of the president’s Joint Address, Michael had a conversation with Ambrosia Berg, a single mom from Boulder who will benefit from the one-year CTC expansion passed in the American Rescue Plan.
    “From personal experience, I know that families living in poverty already face so many challenges. So for me, the expansion of the Child Tax Credit means that my family will have more of a stepping stone to get ahead in a ‘just getting by’ world.
     
    “[The expanded Child Tax Credit] would help me provide the essentials like food, housing, and reliable transportation while also helping me maintain a nurturing environment for my son to develop into a successful member of the community.” - Ambrosia Berg
     
     
    In April, Michael heard from Longmont mom Robyn Boyles about how the enhanced CTC will affect her family. 
    “Financial relief is so crucial for families like mine right now. My husband and I lost our jobs in the restaurant industry when the pandemic hit, shortly after that we found out we were pregnant with our first child. My husband and I are back at work but only part-time, so we are struggling to cover the basics and dig ourselves out of the debt that has piled up because of the pandemic. It’s so stressful to worry about making ends meet as I recover from birth and balance having a newborn. That’s why I’m so excited about the expansion of the Child Tax Credit. The extra money will mean so much to my family and it’s a huge relief. It will help us stay on top of our bills, cover the basics, and have reliable transportation to and from work.”   - Robyn Boyles 

    Support

    Colorado Organizations

    The following Colorado organizations have endorsed the American Family Act: Early Learning Ventures, Early Childhood Council Leadership Alliance, Colorado Children’s Campaign, Colorado Fiscal Institute, United for a New Economy, The Bell Policy Center, Stand for Children Colorado, Community Partnership for Child Development, Peak Vista Community Health Centers, Catholic Charities of Central Colorado, Mesa County Partnership for Children and Families, and Family & Intercultural Resource Center

    National Organizations

    The following organizations have endorsed the American Family Act: Center for American Progress, Center on Budget and Policy Priorities, Center for Law and Social Policy, Child Care Aware of America, Children’s Defense Fund, Community Change Action, Economic Security Project, First Focus, MomsRising, National Association for the Education of Young Children, National Women’s Law Center, Niskanen Center, Service Employees International Union, Zero to Three, Child Welfare League of America, Public Advocacy for Kids, and Every Child Matters.