NJ Families Still Owed $415M In Child Tax Credits, Report Finds: How To Get It

NEW JERSEY — About 138,000 New Jersey households eligible for the Child Tax Credit have not received payments, leaving an estimated $415 million unclaimed, according to new research. And many of those families are struggling to make ends meet, according to findings from United Way of Northern New Jersey.

The benefits offer families a maximum credit of $3,600 per child aged 5 or younger and $3,000 per child ages 6-17. But those who haven't received the Child Tax Credit can still get it this tax season.

Fifty percent of New Jersey households who both struggle to make ends meet and have children did not receive their Child Tax Credits, according to United Way of Northern New Jersey. The organization determined this through its "ALICE" metric. ALICE stands for Asset Limited, Income Constrained, Employed. So ALICE families include people and families who earn above the poverty level but whose costs of living outpace what they earn.

The United States has 12 million families below the ALICE threshold, and 5 million of them have a combined $14.8 billion in unclaimed Child Tax Credits, according to United Way of Northern New Jersey.

United For ALICE, which is part of the North Jersey nonprofit's research arm, assembled the data by analyzing U.S. Census surveys between July and October. The IRS sent Child Tax Credit payments to about 36 million families from July through December.

The American Rescue Plan Act of 2021 — a federal coronavirus relief package signed into law last March — temporarily expanded the Child Tax Credit. The law increased to a tax credit of $3,600/$3,000 per eligible child for single filers with incomes less than $75,000, unmarried joint filers with incomes below $112,500 and married joint filers with incomes under $150,000.

The credit phases down to $2,000 above the aforementioned income levels up until $200,000 for single filers and unmarried heads of households and $400,000 for married joint filers. Then it phases down to $0.

The expanded credit expired in December after Congress failed to pass the Build Back Better Act, which would have extended the setup for an additional year.

But families with unclaimed money who are filing their taxes by April can still receive the credit in a lump sum. See the IRS's frequently asked questions about the Child Tax Credit.

“By filing their taxes this year, families who are struggling to afford the basics could receive a much-needed financial lifeline,” said Kiran Handa Gaudioso, CEO of United Way of Northern New Jersey. “Any credit or refund they receive can mean the heat stays on, child care is covered, rent is paid.”

Free tax preparers across the county can help families access the Child Tax Credit, Earned Income Tax Credit, and Child and Dependent Care Credit. That includes United Way’s Volunteer Income Tax Assistance program, which is assisting with low- and moderate-income individuals and families with filing their 2021 state and federal tax returns. (Businesses and landlords aren't eligible for United Way's service.)

"In the past, when we were in-person, our aim was to serve clients within our five-county footprint," said Maria DaSilva-Gordon, a spokesperson for United Way of Northern New Jersey. "Since our services are once again online this year, essentially any low- to moderate-income household anywhere in the state can have their state and federal taxes prepared and filed for free using our secure online portal."