Advocates fear poorest families could miss out as Biden's child tax credit payments begin to flow

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WASHINGTON – The federal government will begin distributing more than $100 billion in financial assistance to parents Thursday, one of the most expensive parts of the $1.9 trillion coronavirus relief package passed in March and a key to President Joe Biden’s efforts to cut child poverty in half this year.

Meeting that goal depends on the administration getting the money to those who need it most.

Families too poor to owe taxes may not have information on file with the IRS, which will send monthly advance payments for the expanded child tax credit.

Advocacy groups raised concerns to the White House, particularly about the IRS’ online tool that parents who haven’t filed tax returns are supposed to use to apply for the funds – up to $3,600 per child for younger children and up to $3,000 for those ages 6 to 18.

“We have been talking to the White House and the Treasury for weeks now about this, about how to make it more accessible,” said Dorian Warren, co-president of Community Change and co-chair of the Economic Security Project. “They have listened and heard us. They know it's a problem. But I'm still worried and concerned.”

Gene Sperling, who oversees the administration’s implementation of the American Rescue Plan, said he agrees with advocates that the online application tool needs to be improved, but that shouldn’t detract from the government’s major achievement of quickly creating a way to reach nonfilers and to turn half of the tax credit into a guaranteed minimum monthly income – particularly for more than 26 million children from low-income families who will see the full benefit for the first time.

“There’s no question that not every wrinkle will be smoothed out in such a short period of time. But we’re committed to staying at it until we get everything right,” he told Paste BN. “Many major new programs have taken years to start up. This monthly child tax credit is going to be reaching the overwhelming majority of middle-class and low-income families in four months, monthly, and on the same day. That’s not something anyone should just take for granted.”

Supporters said the stakes are high for the program to be successful, both to ensure families get immediate help during the pandemic as well as to make the case that the funding should continue beyond this year.

Unclaimed premium tax credits 

Biden also wants to make permanent another expensive part of the coronavirus relief package, expanded premium assistance for people who buy health insurance on their own.

Although more than 1 million people have selected an Affordable Care Act plan costing $10 or less per month since the temporary boost went into effect in April, there are millions of Americans eligible for assistance who remain uninsured.

A survey in May by the Kaiser Family Foundation, a nonpartisan health research organization, found that only about 1 in 10 of those eligible for federal premium subsidies were aware the assistance had been expanded.

“The administration is trying to address that,” said Cynthia Cox, vice president of the Kaiser Family Foundation. “They have dedicated more funds to outreach and marketing. But I think some advocates might think that it’s not enough.”

The Department of Health and Human Services said it has an extensive outreach and educational campaign, which spans TV, digital, email, radio and streaming networks such as Hulu.

Weekly themes have been used to engage underinsured communities. The administration, for example, has partnered with companies in the gig economy to get information to those workers, devoted outreach to rural residents and faith communities and held an LGBTQ “week of action” in June.

“Four out of five customers can get a plan for under $10 a month,” boast ads that have run in English and Spanish, including a soccer-themed ad aimed at Latino males.

As the special enrollment period created by Biden heads toward its closure on Aug. 15, the administration is likely to make a concerted push to highlight affordability through ads, outreach and engagement, according to a source familiar with the plans, which have not been announced.

Families can get up to $300 monthly per child

The expanded child tax credit could be Biden’s biggest domestic achievement, especially if it is extended.

Nearly 10 million children lived below the poverty line before the pandemic, according to the Center on Poverty and Social Policy at Columbia University.

The American Rescue Plan temporarily increased the amount of money low- and moderate-income families will receive from the child tax credit and the number of children and households who are eligible for it this year.

A single mom with a toddler and a second grader who makes about $10,000 a year working part-time as a home health aide is eligible for more than $5,000 more than the approximately $1,200 she would normally receive, said Chuck Marr, director of federal tax policy at the left-leaning Center on Budget and Policy Priorities.

“That’s potentially a game changer,” Marr said.

Child tax credit: Families plan how they’ll spend extra cash.

Unlike the regular credit, half of the amount is parceled out in monthly advances, so recipients don’t have to wait until they file their taxes next year to benefit.

“Getting payments to individuals on a monthly basis has not been done before,” said Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center, who said she would not have thought that “historic” change possible for the IRS to implement. “That will be providing assistance to families in real time."

Eligible families will receive a payment of up to $300 per month for each younger child and up to $250 per month for each child age 6 and older.

Biden touts benefits

Biden has repeatedly touted the benefits when talking about the relief package.

“Maybe the thing I'm proudest of is getting us back on track to cut child poverty in half,” Biden said in June during a virtual fundraising reception for the Democratic National Committee.

Megan Curran, policy director at the Center on Poverty and Social Policy at Columbia University, said the administration is right to call the expanded child tax credit historic because “the U.S doesn’t tend to do these big sweeping changes all at once, especially in terms of tackling child poverty.”

Making such a big change in a short amount of time creates enormous pressure.

“So many other countries have a similar type of child benefit like this in place. But they’ve been in place for decades,” she said. “We’re basically trying to squeeze in a major policy change into an extremely tight timeline.”

The White House frequently cites her center’s report to say that the tax credit and other components of the American Rescue Plan could cut child poverty in half this year.

But that’s only “if things go perfectly, and everyone receives what they would now be eligible for,” Curran said.

When will the child tax credit payments go out?

About 39 million households – covering 88% of children in the USA – will begin receiving monthly payments automatically on Thursday, according to the IRS.

The number of kids at risk of being left out is not known but could be a few million, according to Curran.

Through the administration of the stimulus payments to individuals who  were included in coronavirus relief packages last year and in March, the IRS has experience reaching out to people not in their system through tax filings.

“One catch is, you still have to go online to enter this information if the IRS still doesn’t know you and your child exist,” Holtzblatt said. “And we know for this population that there's going to be a sizable group of people who don't have access to the internet.”

A study she worked on last year found that of the people who appeared eligible for the first round of stimulus payments but hadn’t received the money within four to six weeks, about one in five did not have access to the internet at home.

IRS portal criticized

Even for those who have access, the IRS’ online tool is unnecessarily difficult for both households and administrators to use, according to the People’s Policy Project, a crowd-funded think tank.

“It’s no good,” said Matt Bruenig, the project president.  “It’s not mobile-friendly. It’s not available in Spanish. It’s really kind of intimidating and complicated.”

The IRS said it has a dedicated help line for those who need non-digital access.

But the Frequently Asked Questions page on the IRS’ site for the tax credit warns those trying to get it not to pick up the phone for help.

“Do not call the IRS,” the site says. “Our phone assistors don't have information beyond what's available on IRS.gov.”

Warren of Community Change, one of approximately 30 groups that have been convening weekly to prepare for the rollout, credits Sperling and other administration officials with being responsive.

“He was very honest with us saying, ‘There’s a lot of things keeping me up at night,’” Warren said.

Community Change will hold a virtual rally Thursday to kick off its outreach efforts, featuring celebrities, members of Congress and Vice President Kamala Harris. .

The United Way plans an ad campaign aimed at reaching more than 5 million families along with a toll-free help line offering support in English and Spanish.

Biden will speak at a White House event Thursday as the administration expands its efforts, partnering with nonprofit groups and the private sector.

IRS assistance events

The IRS has hosted sign-up events in major cities where data shows there are large pockets of children in households that don’t normally file a tax return.

Monday, the agency announced a Spanish-language version of its online tool to determine eligibility, though the sign-up portal for nonfilers is only in English.

“We've made very significant progress through getting the first-ever nonfiler portal sign-up for the child tax credit, setting up childtaxcredit.gov and engaging in ongoing outreach and organization ” Sperling said. “But we also would like to see the portal be in Spanish, and more technologically accessible and to work with community groups across the country to have more trusted messengers reaching people and being there to help them sign up.”

Marr, of the Center on Budget and Policy Priorities, said the federal government needs to engage state agencies. Through food stamp and Medicaid programs, states are in contact with many households that don’t regularly file tax returns, he said.

“I think they’re making good effort,” Marr said of the federal government, “but more could be done.”

'Large pot of money'

On the health insurance subsidies, the biggest barrier to expanding the take-up rate is making people aware of the assistance, said Cox of the Kaiser Family Foundation.

The second challenge is providing in-person assistance to navigate the process.

Though the Biden administration has ramped up TV ads and other marketing, increasing community engagement takes time, Cox said, because the administration has to hold a competitive grant process to fund outreach coordinators.

“That process is starting to happen now,” she said.

The administration has more than $1 billion in user fee revenue accumulated during the Trump administration, which cut back on outreach for the Affordable Care Act.

“So there's a large pot of money that the Biden administration could tap into to do some really significant marketing efforts, if that's what they wanted to do,” Cox said, “potentially an order of magnitude beyond what they're doing.”

The Department of Health and Human Services announced in April it will spend $80 million hiring navigators to help people sign up for 2022 insurance, the largest amount the agency has ever allocated and eight times the funding from the last year of the Trump administration.

A spokesperson said the administration will continue working with trusted community groups and partnering across government to “make people aware of the savings available and connect people to the coverage they need.”

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