What’s the Deal with the Child Tax Credit?

What’s the Deal with the Child Tax Credit?Ah, tax season. Typically, this is not the type of season where we’re thinking about buying cards and making merry, but the type of season where you’re either about to lose a lot of money or get some back. Naturally, this can be stressful — and that’s just for the Average Joe. For those of you who are single parents, especially during these wonderful (note the sarcasm) years of COVID, taxes and benefits and all the complicated little bits in between can be more than a little daunting.

This past year saw an unprecedented level of government assistance, and that’s been great. Struggling parents who haven’t been able to work during the pandemic or for any other reason were supplied with some of the tools they needed to support their families. However, these programs were never meant to last forever, and we’re starting to find that out the hard way. So if you rely on something like the child tax credit, it can be kind of a big deal to find out that extra dough could be on its way out.

New infrastructure bill can bring welcome relief

If you are a parent to a minor child, you have likely already reaped the benefits of the child tax credit. It’s a COVID-era policy that basically promises some extra cash to families each month. You could use it on food, clothes, medicines, or even to pad up your savings as you trudge through these treacherous times, which is a beautiful thing considering most government benefits have very strict usages.

Here’s the thing, though — it was only for 2021. And (in case you haven’t noticed) 2021 is, well, over. That means that all these families who have come to rely on these payments over the months may have just received their last checks — at least for the time being. It is pretty easy to imagine how that can hit someone hard, especially as we go through another COVID surge. There is, however, a replacement bill in the works that would both raise the amounts families can receive and make that credit refundable. Specifically, the bill would extend 2021’s policy to the tax break through 2022, which would ideally mean no one would miss any payments.

In order for that to happen, it needed to be passed before Christmas, because everyone in government was on recess until after the New Year, which means the bill lapsed.

Alternatives to the child tax credit

First, take comfort in this: the child tax credit is not disappearing altogether. In 2022, it will simply be lapsing back to its original conditions (a $2,000 credit per dependent child), which have since been boosted up a couple times. It’s also unfortunately probable that families may not get their checks again until after they file their taxes.

Some families will be hit by this change harder than others, of course, but there may be other modes of relief. You may be eligible for the Earned Income Tax Credit. There are rules about eligibility, so you should speak with an experienced accountant about it.

For single parents who may already be struggling, those payments were a much-needed lifeline that simply can’t be skipped for a couple months. While it is true not everyone will be eligible for every option, there are some alternatives to the child tax credit you may want to look into if they apply to you.

If you are specifically a single parent, you may need to look into modifying the child support order. In order to modify an order, you need to prove a substantial or material change in circumstances, and if your original order was based on income derived from the credit, you could have a good argument that your circumstances have changed; after all, you’ve lost a significant amount of monthly income. This works both ways, BTW – whether you’re receiving support or paying it. Remember that child support is, well, support for the child, so modifying an order is about protecting the kids.

If the issue is that your ex won’t pay, then it’s time to talk enforcement. Child support orders are mandated by the courts: if you don’t pay, you’re gonna be in big trouble. So if your ex is slacking off and hasn’t paid support, you need to tell your lawyer. The penalties range from wage garnishment to contempt of court and jail time – it’s a big deal all around.

Seriously, talk to an attorney before trying to do anything concerning a support order. The answer may very well be “no,” but an experienced professional can still advise you on what options you DO have and can help you get started to the best of their ability. If you have a case, they can work to build it with you, and then they can present it on your behalf in a way the court is likely to approve. Knowing what the court likes is about ninety percent of being an attorney — trust us.

Speaking of, our Knoxville divorce attorneys at LaFevor & Slaughter definitely know what the court likes, and we’re not interested in yanking your chain or pulling your leg. This is about your money and your family — it’s serious, and we agree. We will tell you honestly what options are available to you, and we’ll help you see them through to the end. For a free consultation, call us today at (865) 637-6258 or use our contact form.

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