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It's Not Too Late: The Tax Credit Expansion Could Still Provide Billions to Black Individuals and Families

These tax credits aren’t widely known but could put some extra money in your pockets.

Tax season is far from over! Individuals that make less than $12,550 and married couples that make less than $25,100 can file through November. Congress has temporarily expanded the CTC and EITC—which benefits the 50% of Black children who were previously ineligible for the full CTC credit because their families’ incomes were too low and the disproportionate percentage of EITC-eligible tax filers that are Black (19%), according to Samantha Tweedy, President of the Black Economic Alliance Foundation.

To ensure everyone applies for the tax credits this year, BET created five fast and simple steps:

  1. Learn the Facts: Discover the expanded tax credits; the average family can receive a $4,380 CTC and childless workers are eligible for up to $1,500 in EITC.
  2. Check your Eligibility: Workers 19 years and older may now be eligible for the EITC credit and nontraditional families now qualify for CTC.
  3. Make a Filing Plan: Filing can be easy with free resources online and in-person.
  4. Get Your Money: While the filing deadline is April 18, many Black Americans can file simplified returns through November.
  5. Tell Friends and Family: Spread the word, spread the wealth and the access to resources.

The EITC expansion benefits more than 17 million workers in the U.S. yet 1 in 5 loses out on this benefit each year – likely because they are unaware they qualify.  This results in billions of dollars in unclaimed benefits. With so many newly eligible workers this year, it’s important to help get the word out about who qualifies and how to get this credit, said Roxy Caines of the Center on Budget & Priorities.

These credits can save eligible tax filers an average CTC of $4,380  and up to $1,500 in  EITC. Those who do not owe taxes or normally file because their income thresholds are below $12,550 for single filers and below $25,100 for filing jointly can submit simplified returns until November

BET.com sat down with Roxy Caines of the Center on Budget & Policy Priorities to talk about the significance of these tax breaks for Black Americans. 

BET.com: What are the Earned Income Tax Credit and Child Tax Credit?

Roxy Caines: The Earned Income Tax Credit is a federal tax benefit that can provide money back or lower a person's federal taxes owed. It is designed specifically for people who work/earn income. The Child Tax Credit is a federal tax credit designed to help raise children. These tax credits can be claimed when filing a tax return.

BET.com: What does an expansion in tax credits mean?

Caines: The expansion means more people can get tax credits. The EITC and CTC have been expanded through the American Rescue Plan for the 2021 tax year, which is the year we are filing taxes for now.

This tax season, the Earned Income Tax Credit (EITC) expands eligibility for working adults without children by:

EITC Earned income tax credit calculations on the page.

  • Increasing the credit amount people can receive.
  • Raising the income limit for qualifying adults.
  • Making the credit available to a wider range of age groups, from 19-65 and up.

More than 2.7 million Black workers without children will qualify for this income support when they file their taxes this year. Additionally, homeless youth and former foster youth who are at least 18 years old and work are eligible to claim this credit, even if they are enrolled in school.

The Child Tax Credit (CTC)

Child Tax Credit is shown on a conceptual photo using the text

  • Is available to all types of families including non-citizen parents, grandparents and other relatives raising children. As long as your child has a Social Security number, your family likely qualifies for the expanded Child Tax Credit.
  • In 2021, advance payments of the Child Tax Credit offered families the option to receive half of the credit in monthly installments. Families can still receive the remaining credit or full lump sum if they didn’t get advance payments when they file taxes this season.
  • The one-year expansion is projected to reduce child poverty by 40%.
  • Approximately, 9.3 million Black children under 18 could benefit from this expansion.

BET.com: What are the eligibility requirements to receive the tax credits?

Caines: The requirements for each tax credit are different, so here’s a quick breakdown.

Child Tax Credit

Paper family and words child tax credit on the blackboard.

  • Don’t stress if you don’t have recent income. There is no minimum income requirement to claim full credit.
  • If you have a child with a Social Security number (SSN), you can get the CTC even if you don’t have a Social Security number.
  • A child must qualify for the credit based on the relationship of the child to the filer, the age of the child, the child's residency and their dependency status.
  • Families who don’t normally file a tax return can still get the full Child Tax Credit.

Earned Income Tax Credit

Earned Income Tax Credit

  • Individuals or families must earn income from wages, salary or tips, money from self-employment, benefits from a union strike, disability benefits, or combat pay to qualify.
  • There is no minimum income required to be eligible, but there is a maximum income requirement.
  • People ages 19-24 and 65 and older who work are now eligible, even if they don’t have kids or usually file taxes.
  • Workers who are 19-23 and were full or part-time students for more than 5 months in 2021 do not qualify.
  • Homeless youth and former foster youth ages 18+ who work are eligible, even if they are a student.

Workers must file their federal taxes by April 18 to get this benefit. It is also possible to claim both credits if an individual or family is eligible to receive them.

BET.com: How does the expansion of these tax credits benefit Black families, those with and without children?

Caines: Black and Latino families are overly represented in low-paid work due to historical and ongoing discrimination. Last year, individuals and families overwhelmingly used their Child Tax Credit payments to support their well-being and meet their basic needs. Payments were mostly used for food, rent, utilities, and education-related expenses. The Center on Budget & Policy Priorities expects to see the same pattern when people receive their payments this year.

The Child Tax Credit would lift 4.1 million children above the poverty line, and Black children would disproportionately benefit.The Earned Income Tax Credit will boost the incomes of more than 17 million working adults who earn lower wages and are not raising children at home. With the expansion, the maximum value of the credit triples from $538 to $1,502. Similar to the Child Tax Credit, the EITC is often used to meet basic needs like paying rent, transportation, medical expenses and more.

BET.com: How do I receive these credits?

Caines: The first step to receiving the tax credits is to file a tax return. The fastest and safest way to receive a refund is through direct deposit. 

There are multiple alternatives for those who don't have a bank account and are unable to open one—the IRS can mail a paper check, deposit payments onto a reloadable debit card, or deposit payments in an account with a routing number that is linked to a money sharing platform like Cash App and Venmo.

BET.com: Is the expansion permanent?

Caines: The expansion is not permanent. But it’s important that Congress approves the expansion of these tax credits beyond the 2021 tax year.

BET.com: What resources can people use to support them in filing for these credits?

Caines: Workers can get free help filling out a tax return at GetYourRefund.org, or they can call 211 to identify any local free tax preparation sites that help people claim the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) this filing season.

For free legal help on tax issues with the IRS, including owing back taxes, find your local Low Income Taxpayer Clinic (LITC).  You can also make an appointment with your local Taxpayer Assistance Center.

The IRS will NEVER contact you by phone, email, text message or social media to request personal information – especially banking details – or ask you to provide a “processing” fee.

BET.com: Will a person qualify for public benefits if they file these credits?

Caines: Yes, do not worry! You can still qualify for public benefit programs like food assistance, disability and unemployment programs.  The tax credits do not count as income or financial resources for 12 months after they are received.

Tax Concept

To review, here are a few fast facts from the Center on Budget & Policy Priorities for this year's tax season:

Child Tax Credit

  • Under a recent federal law, almost every family can receive money from the Child Tax Credit. This includes families who haven’t filed a tax return before and those without recent income. An estimated 65,560,000 children in the country qualify for the expanded Child Tax Credit this season.
  • Each qualifying household can receive up to $3,600 for each child under 6 years old, and up to $3,000 for each child between 6 and 17 years old.
  • Families who received monthly payments last year will get the second half of the credit when they file taxes this year.
  • Families who missed payments last year will still get the full credit when they file a tax return this year.
  • Anyone whose child has a Social Security number is eligible, even if they do not have a Social Security number themselves.

Earned Income Tax Credit

  • For the first time, workers 19-24 and 64 and older without kids now qualify for this tax credit, expanding this significant tax benefit to more people than ever before. An estimated 17,445,400 workers in the country are now eligible for the federal Earned Income Tax Credit.
  • Adults ages 19 years or older who earn money from a job or certain disability benefits qualify.
  • Workers who are 19-23 and were full- or part-time students for more than 5 months in 2021 do NOT qualify.
  • Homeless youth and former foster youth ages 18+ who work are eligible, even if they are a student.
  • Workers may qualify for an income boost of up to $1,500 if they don’t have children living with them, or up to $6,700 if they raise children at home.
  • Eligible workers could make up to $27,380 without kids or $57,414 with kids in 2021, and qualify for this tax credit as long as they and any spouse or child claimed on their taxes have a valid Social Security number.To ensure everyone applies for the tax credits this year, BET created five fast and simple steps: 

Roxy Caines is the EITC Campaign Director at the Center on Budget and Policy Priorities (CBPP). Caines joined the Center’s National Tax Credit Outreach Campaign in 2004. As the Earned Income Credit (EITC) Campaign Director, she provides technical assistance, leads training and develops outreach materials to assist organizations nationwide as they conduct local outreach campaigns that promote the EITC, the Child Tax Credit (CTC) and free tax filing assistance programs. 

Aysia Morton is a culture writer and critic that specializes in the topics of race, justice and identity.

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