Do your Employees Qualify for the Childcare Tax Credit?
For the first time ever, most working families will receive the Child Tax Credit directly deposited into their accounts starting July 15, 2021. This will substantially offset childcare costs for millions of Americans. Many important changes were made to help families receive multiple, smaller advance payments of the Childcare Tax Credit this summer, and it may directly benefit employees or co-workers at your workplace. Read on to know how to help, and pass along this crucial information.
As leaders in our communities, we have a responsibility and an economic incentive to ensure we share information to help families with early childhood expenses. The increased tax credit will directly help families to afford basic needs including child care payments, and further, improve the workforce by allowing parents to participate in the paid workforce while their children have access to quality early learning experiences.
Who can apply?
Families will qualify for a full credit of $300 per month for children ages 0 to 5 or $250 per month for children ages 6 to 17 dependent on separate or joint income levels. To qualify, their income must be below $75,000 for single filers, $112,000 for people filing as head of household, or $150,000 for people who are married and filing jointly.
The first check from the IRS will be sent out July 15, and these benefits will continue through December 2021. Families will receive the remaining $1,500 to $1,800 per child that they are eligible for when they file their 2021 taxes.
Where can people learn more?
The IRS has created an online calculator along with other online tools to check if individuals qualify this year. The calculator automatically determines eligibility and issue advance payments based on the information individuals provide. After the IRS determines eligibility, the advanced payments will be received automatically on the 15th of every month through December.
Why is this important?
When employees can afford childcare and basic needs, workplace and workforce readiness and success increase. This expansion is estimated to cut child poverty in nearly half nationwide this year and benefit almost 90% of Colorado children.
What do you need to do?
Do your part to share this information with human resources departments or with employees so they can access the IRS website to see if they qualify.
Interested in getting involved, check out our partners at Care for All Children.
It’s because of community leaders such as yourself that EPIC is able to provide this valuable content for Colorado employees. Do you know a community leader who would benefit from this information? Send them our way.