MILLIONS of California families will benefit as they receive tax refunds of up to $1,050 as part of a new relief initiative called the Middle-Class Tax Refund.
California residents are getting refunds that total $9.5billion, which began going out in October, and will continue to be distributed until January 2023.
Around 23million residents will receive the aid, which is part of a $12billion relief package, which was authorized by California Governor Gavin Newsom in June.
Until January 2023, each eligible household will receive a payment of between $200 and $1,050.
State residents had to have filed their 2020 tax returns by October 15, 2021, in order to be eligible for a relief check, and the rebate is also not available to anyone who was able to be claimed as a dependent in 2020.
Read our child tax credit live blog for the latest news and updates…
NJ Childcare centers and their $200,000 grants
The New Jersey Economic Development Authority (NJEDA) will start accepting applications for grants from the $54.5million New Jersey Child Care Facilities Improvement Program on Tuesday, November 15, 2022.
The New Jersey First Lady Tammy Murphy announced it will happen in phases to support the state’s childcare sector.
Phase 1 will provide nearly $15million in grants of up to $200,000 to licensed childcare centers in New Jersey to cover the costs of facility improvements.
Vaccines for Children program eligibility
A child is eligible for the VFC Program if they are younger than 19 years of age and is one of the following:
- American Indian or Alaska Native
Just note that children whose health insurance covers the vaccinations are not eligible for VFC vaccines.
This includes when a claim for the cost of the vaccine and its administration would be denied for payment by the insurance carrier because the plan’s deductible had not been met.
Vaccines for Children program explained
This federally funded program provides vaccines at no cost to children who might not otherwise be vaccinated because of their inability to pay.
The CDC buys vaccines at a discounted rate for distribution to registered Vaccines for Children (VFC) providers.
Children who are eligible for VFC vaccines may receive those vaccines recommended by the Advisory Committee on Immunization Practices.
Child care industry faces record shortages
According to the Bureau of Labor Statistics, the childcare sector has lost nearly 9.7 percent of its workforce.
This is about 102,400 employees between February 2020 and September 2022.
Experts are reporting the reason for a decrease in staff is due to low wages as workers in the US made an average of just $13.31 per hour, or $27,680 per year, in 2021.
Claiming the child and dependent care tax credit
The child and dependent care tax credit was also expanded under the Rescue Act.
Families can now claim up to 50 percent of qualifying expenses, up from 35 percent previously.
Once that threshold exceeds that number, the credit percentage rate starts to phase out from 50 percent.
Specifically, families with more than one kid who spent $16,000 in qualifying expenses will be able to claim care credits of up to $8,000.
Claimants with one child can receive credits of up to $4,000.
Washington offers family credit
The state of Washington is offering millions of families a tax credit.
The credit includes $300 for single/married filers with no kids.
However, for families, that rate increases.
Families with one child will earn $600, while those with two will see that boosted to $900.
If you are a family with three or more children, you will earn a tax credit of $1,200.
Food insecurity among children in 2021, part two
Despite the improvements in food insecurity in households with children more broadly in 2021, the share of households with children experiencing the most severe form of food insecurity stayed the same between 2020 and 2021.
And across the board, looking at childless households, the rate of food insecurity was nearly unchanged in 2021 compared to the year prior.
It’s likely that relief payments during 2021 helped decrease food insecurity in households with children, especially the expanded CTC from July to December of that year.
Food insecurity among children reached lowest point in 2021
According to EconoFact, the share of households with children experiencing food insecurity saw the lowest point on record since the measure started in 1998.
Only 12.5 percent of households with children lacked access to enough food for an active, healthy life for all household members in 2021, significantly down from the rate of 14.8 percent in 2020.
This coincided with the extension of the child tax credit nationally.
The percentage drops of households facing food insecurity were higher among Black and Hispanic households with children by two to three percentage points.
Potential Congressional deal could impact CTC
Congress is considering pushing a federal child tax credit into law by the end of this year.
The Washington Post reports these discussions “have been quietly ongoing for months” and could put CTC back on the table.
The Child Care Stabilization Program
According to the White House, the $24billion Child Care Stabilization Program has provided aid to help over 200,000 child care providers.
The program was designed to help childcare companies remain open so 9.5 million children would have a place to go when parents went to work.
Additionally, the program offered grants to childcare places that helped with basic operational costs like wages and benefits, rent and utilities, and program materials and supplies.
Who counts as a child under the credit?
According to the IRS, a child must satisfy the following to get the tax credit:
- Be under age 18 at the end of the year
- Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece or nephew)
- Provide no more than half of their own financial support during the year
- Have lived with you for more than half the year
- Be properly claimed as your dependent on your tax return
- Not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid
- Have been a U.S. citizen, U.S. national or U.S. resident alien
Rhode Island provides child tax rebates worth $250
On October 3, child tax rebates worth $250 per kid started to head to families across Rhode Island.
Governor Dan McKee revealed that the benefit is capped at three kids.
Around 115,000 families in the state are expected to receive the tax credit as payments are sent out over several weeks.
McKee said: “The Child Tax Rebate Program allows us to distribute over $40 million in direct support specifically to middle and lower-income families with children.
“We know costs are rising nationwide, and that’s why Rhode Island is continuing to step up and provide relief on utility prices, small business taxes, and everyday costs.”
The Quality Childcare Initiative Grant, continued
The grant is for two years and up to $150,000 will be available upon request for a proposal grant.
Plus, childcare sites can grab up to $20,000 per year and must meet at least one of the following objectives:
- Increase regulated capacity in an existing Levels 3 or 4 Paths to QUALITY or ExceleRate Illinois program
- Attain Level 3 or 4 in Paths to QUALITY or ExceleRate Illinois for an existing program
- For a new program, show progress toward enrolling in Paths to QUALITY or ExceleRate Illinois and attaining Level 3 or 4
The Quality Childcare Initiative Grant
In an effort to increase quality childcare, the United Way of the Wabash Valley is offering a third round of the Quality Childcare Initiative Grant opportunity.
The initiative is funded through Success By 6 Impact Council which promotes healthy early childhood development.
A major focus is to lay the foundation to prepare children for lifelong learning.
Possible reason for not receiving full payment amounts, continued
If that was undeliverable, the payments were then sent to the address on file, they added.
So, if you were still owed a check the reason might be because you needed to update your address.
Possible reason for not receiving full payment amounts
One possible reason for not receiving the full amount is as follows.
If you had a routing number on file, the state sent the funds via direct deposit.
Florida payments without spending limits
The Sunshine State sent out checks worth $450 per dependent to the following groups of parents and caregivers:
- Foster parents
- Relative caregivers
- Non-relative caregivers
- Families receiving TANF cash assistance
- Guardianship assistance program participants
Families did not need to apply and the checks were mailed directly to eligible recipients.
There were no limits as to what the money could be used for.
Spike in child hunger
Weeks after child tax credits were repealed, cases of child hunger began to rise again.
After payments ended in January, food insufficiency increased by 25 percent by July, reports US News.
The expanded tax credit reduced food insufficiency by 26 percent in 2021
Black, Hispanic, Indigineous and Immigrant families were hit especially hard.
Over 12,000 kids to lose childcare
12,470 childcare spots will be eliminated in September 2024 when the state’s allotment of federal COVID-19 relief funds is exhausted, reports Vicksburg News.
The Mississippi Department of Human Services is using a substantial amount of federal COVID-19 relief funds to keep these spots open, but the money will run out by next year.
State officials are working quickly to find a solution, as experts predict the state will see an additional 5,000 unplanned births a year.
Republican Senators propose Family Security Act 2.0, part two
Americans making over $10,000 are eligible for the child tax credit under the new Republican plan.
Checks per child are limited to under six children.
Those making over $200,000 per year and couples making over $400,000 would receive lower checks due to their income.
For every $1,000 earned above the previously stated incomes, the credit would decrease by $50, as the tax break is intended for Americans with low to moderate incomes, CNBC reports.
Republican Senators propose Family Security Act 2.0
The Republican Senate proposal has plans to take another look at child tax credit checks that expired last December.
The proposal details that families would receive $350 a month per child under the age of five and $250 a month for children ages six through 17.
The mission of childcare credit
The child and dependent care credit is designed to provide financial relief for working parents and guardians in raising a child or a disabled dependent.
The credit is dependent on the taxpayer’s income and the expenses used to provide for the child or dependent.
It ultimately reduced the federal income taxes, which means people can receive a higher refund.
Survey shows poverty still rampant
In a recent survey from the Center for Law and Social Policy, of parents earning $75,000, it was found that 60 percent of parents who stopped receiving federal credit are struggling financially.
Among these parents, about two-thirds said they had trouble covering basic needs including food and groceries (66 percent) and paying the bills (65 percent).
40 percent struggled to pay the mortgage, and nearly half struggled to purchase.
Tax credit helps make college more affordable, continued
The Lifetime Learning credit is:
- Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify
- Available for all years of postsecondary education and for courses to acquire or improve job skills
- Available for an unlimited number of tax years
The taxpayer or the dependent must have a Form 1098-T, Tuition Statement in order to receive this credit.
There are exceptions for some students who must complete Form 8863, Education Credits, and file it with their tax return.
Tax credit helps make college more affordable
The American Opportunity credit and Lifetime Learning credit can help offset the costs of higher education.
Eligible taxpayers who paid for themselves, their spouses, or dependents to attend college in 2021 can qualify for these credits.
The American Opportunity credit is:
- Worth a maximum benefit of up to $2,500 per eligible student
- Only available for the first four years at a post-secondary or vocational school
- For students pursuing a degree or other recognized education credential
- Partially refundable; Taxpayers could get up to $1,000 back