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The Saint Paul & Minnesota Foundation partners with the Office of Financial Empowerment to help spread awareness about the new benefits of the child tax credit.

If you are a parent, you might not be aware of the recent changes to the child tax credit. To help spread awareness and support families, local nonprofits are providing training and tax assistance services to help families get the full benefit of this tax credit.

In response to the pandemic, the 2021 child tax credit has expanded to provide families with children under the age of 17 more financial benefits. The new credit is now fully refundable and includes a significant increase as well as the option of advance monthly payments.

“Rather than wait for tax season to get one tax refund, filers with children can get all the money at once during tax time or could get half the credit in monthly payments during the last six months of 2021,” said Kasey Wiedrich, financial capacity manager for the Office of Financial Empowerment (OFE), which works to help Saint Paul residents repair generational disparities and build equitable economic stability. “So if you have three kids who are school age, the family could get $9,000 just in the child tax credit and receive half of that money in advance of filing.”

These changes have allowed more families, specifically lower income families, to take advantage of this tax benefit.

“Just having this extra little bit helps people make ends meet,” Kasey said. “People are able to pay their bills, save a little bit of it for next month and pay for those necessities. They are also able to do things like buy their child's birthday cake. I think having that additional amount of money can make a huge difference for families.”

Through the Earned Income Tax Credit (EITC) Funders Network, the Saint Paul & Minnesota Foundation partnered with OFE to provide nonprofit partners such as Prepare + Prosper, CLUES, Lutheran Social Services and the International Institute of Minnesota with funding to support their child tax credit outreach efforts. These services include volunteer income tax assistance as well as support for filing for advance payments in the fall of 2021.

“CLUES offered webinars and training to walk people through how to fill out forms on the child tax credit website, and Prepare + Prosper created webinar training for other nonprofit organizations and partners that could assist people in using the tool,” said Kasey. “They also provided assistance to people who needed help signing up on the website. Individuals could make an appointment with Prepare + Prosper, and staff would help them fill out the online tool for advance payments.”

Steps to Create an Equitable Community

Efforts like these make a big difference, especially in Saint Paul. According to Community Action Partnership of Ramsey & Washington Counties, Ramsey County has the sixth highest poverty rate among Minnesota’s counties, with Saint Paul having an overall poverty rate of 19.4%.

Under Mayor Melvin Carter, OFE has made it their mission to bring economic democracy and prosperity to all people in the city, including its youth. The office does this work by providing financial resources and support to youth and their families. It is primarily through the City's college savings account initiative, CollegeBound Saint Paul — which has a support fund at the Foundation — as well as the child tax credit and assistance to other City departments.

According to recent census data, families with children in their households saw a 3% decline in food insufficiency after the first round of child tax credit payments.

As of now, advanced payments happened only in 2021, ending in December. The 2022 child tax credit is expected to revert back to its original tax refund. If the Build Back Better bill passes, the new changes could extend for another year.

Families that didn’t register for advance payments last year still have the opportunity to get the full refund at tax time this year when they file a tax return.

If you are interested in receiving the refund or tax assistance, CLUES, Prepare + Prosper and the Community Action Partnership of Ramsey & Washington Counties offer free tax services for families in need. Families can also contact the Minnesota Department of Revenue for more questions, assistance and or information on free tax prep.