Iowans received nearly $1 billion in child tax credit payments this year, report says

Stephen Gruber-Miller
Des Moines Register

Iowans have received nearly $1 billion over the last six months as a result of the expanded child tax credit included in the American Rescue Plan, a new congressional report shows.

The tax credit, which is paid to families monthly, went into effect in July. Families receive payments each month of $300 per child under 6 years old and $250 per child 6 and older.

Annually, the tax credit comes out to $3,600 for children under 6 and $3,000 for children 6 and older. Since the expanded credit went into effect mid-year, families will receive the remaining 2021 tax credit as a lump sum when they file their 2021 tax returns.

In the first six months of the expanded program, the payments added up to $946.4 million across Iowa, according to a report from Congress' Joint Economic Committee.

The data show payments went to more than 340,000 families statewide and included the parents of 624,000 children.

There are at least 80,000 families and 150,000 children in each of Iowa's four congressional districts receiving the credit, the report shows.

  • 1st District: 151,000 children; 83,000 families; $229.4 million
  • 2nd District: 150,000 children; 83,000 families; $226.9 million
  • 3rd District: 173,000 children; 98,000 families; $262.8 million
  • 4th District: 150,000 children; 80,000 families; $227.3 million

Iowans with children qualify for the child tax credit if their household income is less than $112,500 for a single tax filer or less than $150,000 for a married couple filing jointly.

Previously:Iowa families will start getting child tax credit checks this week. Here's how it works.

The American Rescue Plan, which President Joe Biden signed into law in March, expanded the child tax credit, which was previously $2,000 annually. The legislation also made the tax credit fully refundable, meaning if families owe less in income taxes than the amount they receive through the child tax credit, they will receive a payment for the difference.

U.S. Rep. Cindy Axne, a Democrat, was the only member of Iowa's congressional delegation to vote for the law.

"Not only is this nearly a billion dollars in tax cuts for Iowa families, who are using this extra money in their pocket to cover their expenses, raise their children, and afford a middle-class life," Axne said in a statement. "This is nearly a billion dollars going back into Iowa’s small businesses and local economies."

Without further congressional action, the expanded credit will expire at the end of the year. Biden's wide-ranging Build Back Better legislation would continue the expanded child tax credit through the end of 2022. The measure passed the House last month and awaits a vote in the Senate. Axne was the only member of Iowa's congressional delegation to vote for that bill, as well.

More:Cindy Axne was the only House member from Iowa to vote for the Build Back Better. Here's why she did.

Republicans have criticized the nearly $2 trillion Build Back Better legislation, saying the price tag is too high and that it will add to the nation's deficit and worsen inflation.

Axne said extending the tax credit for another year would have a positive impact on Iowa's economy and families.

"That’s why I voted last month to extend this benefit through the end of next year," she said. "And I continue to urge my colleagues in the Senate to pass our Build Back Better Act as soon as possible to ensure these tax cuts continue to reach Iowa."

The Joint Economic Committee report said U.S. Census Bureau data show 56% of Iowa families spent their tax credit payments on food, 33% spent the money on internet and utilities, 30% used it for mortgage or rent payments, 30% spent it on clothing and 11% used it to pay for child care.

The report said the expanded child tax credit provisions in the American Rescue Plan are expected to reduce childhood poverty by more than 40%.

What do I have to do to sign up for the child tax ?

Iowans who paid taxes last year or signed up for a stimulus check through the IRS should receive the tax credit automatically.

Those who didn't file tax returns in 2019 or 2020 and didn't receive a check from any of the rounds of federal COVID-19 stimulus packages can receive a tax credit by filing a tax return next year. They can go to childtaxcredit.gov to find more information.

Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.