Helping Families Access Tax Credits: A Population Health Tactic

The 2021 federal Child Tax Credit has caught the attention of many in pediatrics as an important, enhanced way to address social determinants of health for low-and-middle income families.

That’s for good reason, as we’ve learned in the Healthy Neighborhoods Healthy Families initiative at Nationwide Children’s Hospital. Since 2008, our initiative has worked to build and improve housing, provide workforce training and improve educational opportunities in one opportunity-rich community – and we’ve recently expanded to a second neighborhood.

But in 2019, we started standing up free Volunteer Income Tax Assistance (VITA) clinics as well. We knew some residents were struggling with filing taxes and paying others to do it for them. Our conversations also led us to understand that some were missing out on tax credits that could make a real difference for them. Those credits can become refunds that help families pay rent, buy groceries and otherwise have a higher quality of life.

The impact was clear during this last filing season. Our free clinics helped 469 taxpayers draw more than $1 million in refunds, including more than $500,000 in Child Tax Credits and Earned Income Tax Credits. Most of those taxpayers had adjusted gross incomes of less than $30,000.

We’ve seen people cry from happiness as they learned they were going to get refunds – sometimes in the thousands of dollars – that they didn’t know they were eligible for. We think the 2021 Child Tax Credit is going to make an even greater impact for families.

That’s why Nationwide Children’s, the American Academy of Pediatrics, and a number of organizations invested in child health are working to distribute information about the enhanced tax credit to providers and families, because of its potential to have an effect on everyday lives.

We feel it’s a great investment in community health to operate our tax clinics, but many families will be able to take advantage of this year’s enhanced credit with little or no work on their own.

Here’s What’s New:

As part of the American Rescue Plan passed earlier this year to address the economic effects of the COVID-19 pandemic, the Child Tax Credit was raised to $3,600 per year for qualifying children 5 years of age and younger and $3,000 for qualifying children 6-17 years old. Before 2021, the maximum credit was $2,000 per child.

Perhaps most importantly, those amounts are fully refundable, and eligible families can begin receiving monthly payments toward the credit in July, instead of waiting until their taxes are filed in 2022. Often, this will mean that families will receive $300 per month through December for each qualifying child 5 years of age and younger, and $250 per month for children 6-17 years. The remaining amount of the refund will be paid when 2022 taxes are filed.

The credit is available to people with a gross adjusted income of:

• $75,000 or less for singles
• $112,500 or less for heads of household
• $150,000 or less for married couples filing a joint return and qualified widows and widowers

People whose incomes qualify, who filed returns in 2019 or 2020, and whose information has not changed, won’t have to do anything to receive the advance payments – they will be sent automatically.

But people who have not filed in the last two years (in many cases, because they earned too little money) or whose information has changed recently (a new child, a new address) do need to take action.

Much of that can happen here, using online tools from the IRS. 

Healthy Neighborhoods Healthy Families has also created a handout designed for families, to help educate them and guide them through the process. The handout is available for download below.