Parents That Received 2021 Child Tax Credit Surprised at Affects on Tax Returns
By Bushrah Namirimu | Observer Contributor
Social media has been awash with complaints and frustration from many parents who are quite displeased after filing their 2021 tax returns. This is due to the discovery that they’ll be receiving smaller refunds than what they had anticipated, following the advance child tax credit which hit their bank accounts between July and December 2021.
Millions of families across the country received monthly checks from the federal government as a part of the American Rescue Plan. Krista Russell, a student at MWCC, is one of those parents who benefited from last year’s ARP package.
Like most parents, Krista admits that she started receiving $300 a month last July as part of the expanded monthly child tax credit payments which she used to pay for gas to drive her children to school and to feed them healthier meals.
Russell states, “I did receive the child tax credit in 2021. As far as it affecting my tax returns, they were significantly lower…” The payments which were made through the last six months of the year were advances of the credit, worth half of the full amount that parents received.
This was the first time the credit was delivered on a monthly basis, which was intended to help parents pay for housing, food, clothing, and school supplies. However, many parents out there are disappointed that the IRS didn’t do its due diligence of informing them about the options which were available to them and how the plan would affect them in the long run.
“I didn’t get any information on the tax credit and was actually unaware that it would be taken off of my taxes and I was unaware I could have opted out of it. I assumed it was extra money similar to the stimulus check,” Krista adds.
However, according to Nampewo Masagazi, a tax professional with Tyler Tax Service Inc., the Child Tax Credit only changed in a way it used to be distributed which probably confused most parents.
“A lot of clients are upset because they didn’t realize that the early disbursement would come out of what they typically received all at once during tax time. This means that parents can only claim the other half of the credit on their 2021 tax return” Masagazi says.
Ms. Masagazi adds that there was sufficient information from the IRS as a way of preparing the beneficiaries of CTC: “This information was all over news channels and no doubt if they were truly concerned they should have done a little research once that extra money hit their accounts,” she emphasized.
As part of last year’s American Rescue Plan package, parents received half the credit up to $300 a month for children up to age 6 and $250 for those ages 6 through 17 from July through December.
In previous years, some families did not qualify for the Child Tax Credit because they did not make enough money to file taxes, but under the American Rescue Plan, the credit was made fully refundable, meaning that even families not required to pay taxes received this money last year.
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