The extension to credit for children in the new stimulus plan seeks to tackle poverty in the United States.
ROBYN BECK / AFP / Getty Images
The financial blow of the pandemic COVID-19 not only caused that the Internal Revenue Service (IRS) extended the deadline for filing taxes. It also threatens to delay one of the measures of the 1.9 trillion relief plan promoted by the president, Joe Biden, to combat child poverty.
In a hearing held on Thursday before the Ways and Means Committee of the House of Representatives, the commissioner of the federal agency, Charles Rettig, raised the possibility that the IRS may not have the staff to establish an online portal for the new program.
The agency accumulates a delay of 24 million in tax returns in recent years.
However, Rettig promised that the IRS I would “do my best” to launch this initiative before July 1.
The agency’s IT service is also helping out during the tax filing season.
The Child Care for Economic Recovery Act expands the IRS tax credit for each child.
Under this law, parents or guardians will receive direct payments from $ 3,600 per year ($ 300 per month) for each child under 6 years of age and $ 3,000 dollars annually ($ 250 per month) for each child between the ages of 6 and 17. Currently, the child tax credit is $ 2,000 and is not paid monthly.
Cash grants are estimated to have the potential to reduce child poverty by 50%, according to estimates by the Center on Poverty and Public Policy at Columbia University.
The online portal was designed by the IRS for taxpayers to update their relevant tax data to obtain extended child tax credits, such as notifying the government of the birth of a child in 2021, to speed up the process, officials said Thursday. from the Treasury Department. These updates will allow the IRS to make payment adjustments mid-year.
“In addition to this online tool, the Department of the Treasury and the IRS will conduct a broad campaign of public awareness […] to reach all Americans who may be eligible for this financial aid, ”says a fact sheet from the Treasury Department in reference to tax credits.
The Treasury Department said Wednesday that, in the first week since Biden signed the relief package, officials have disbursed 90 million in payments direct for a total of $ 242,000 million. Most of those payments were made by the IRS as direct deposits in bank accounts.
That same day, the department indicated that the deadline for filing the 2020 tax returns will be extended. until May 17, 2021, instead of the traditional April 15th.
The one-month extension applies to both tax filings and tax payments, and is only for taxpayers. Federal taxes on income, not for state taxes.
Taxpayers do not need to take any action to benefit from the new deadline. Those who need more time after May 17 can request an extension until October 15.
With information from AP and The Washington Post.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.