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IRS sending checks to parents this week, slashing child poverty

Researchers say it will free thousands from poverty
Posted at 5:57 PM, Jul 13, 2021
and last updated 2021-07-13 18:06:48-04

DETROIT (WXYZ)  — As a single mom with three children, Brianna Brown knows how stressful it can be to provide, especially in a pandemic. She works in a local school and saw lines for food grow long as families lost jobs and wages.

“We had many kids that went hungry. At my district we fed kids. We passed out food every Monday and those lines were long and full,” said Brown.

An American Rescue Plan program that starts this week aims to help. Starting Thursday the IRS will begin sending out child tax credits of $300 a month for children under six and $250 a month for children under 18 to families.

This program aims to help both low and middle-income families across the country. WXYZ decided to ask how it could transform children’s lives here in metro Detroit.

“It starts with a very basic principle, which says that raising children is expensive and the government and society has a reason to help,” said Luke Shaefer, the Director of Poverty Solutions at the University of Michigan.

He says nationwide this could cut child poverty by 45%.

“In the City of Detroit, in particular, we are talking about more than 20,000 children who could be lifted above the poverty line,” said Shaefer.

He says he has studied such programs in other countries and the impact could go behind attacking poverty.

This has the potential to help children improve academic performance. Plus studies of similar programs in Canada and the UK have even found they resulted in a decrease in purchases of alcohol and tobacco.

“It turns out that a lot of time substance use is a response to stress. And a big stress is not being able to pay your rent or take care of your kids as you want,” said Shaefer.

“The biggest barrier really is making sure you have filed your taxes and provided adequate information to the IRS,” said Wendy Jackson, the Kresge Foundation’s Managing Director for the Detroit Program.

The Kresge Foundation has partnered with others in the community to raise awareness and help families do what they need to qualify.

The United Way of Southeastern Michigan has provided links to resources for help filing at https://unitedwaysem.org/get-help/community-resources/tax-assistance/.

“This really is a historic moment in the U.S. to address child poverty,” said Jackson.

You qualify if you have a dependent child with a social security number and meet income limit requirements. If you file as a single person and your income is under $75,000, if you file as a single head of household and your income is under $112,500, or if you file as a couple and your combined income is under $150,000.

If household income is above those thresholds, you will receive slightly smaller payments, depending on income.

The payments will not count as income for federally funded benefits, such as SNAP. It is fully refundable. This means that the Child Tax Credit will help offset any taxes you owe. If you don't owe any taxes, this money is paid to you as a refund.

Brianna Brown says she is thinking of children she knows who will have more stable lives.

“It means everything. My heart smiles. I pray that it continues. One time is not going to solve it. This one time doing this for a few months, that is not going to solve it. We need to continue this and help in the household with our young children and show we can provide them with better,” said Brown.