5-04-2022 11:50am

Nearly $415 Million in Child Tax Credit Remains Unclaimed in New Jersey

Recent findings by the United Way of Northern Jersey show that 138,000 cash-strapped households with children have not yet received any Child Tax Credit payments, leaving an estimated $415 million unclaimed.

Last year, the American Rescue Plan expanded access to Child Tax Credits to reach more families, including those United Way calls ALICE (Asset Limited, Income Constrained, Employed) who earn above the poverty level, but less than what is needed to afford the essentials.

To receive the full credit payment, families will need to file a return this upcoming tax season. The benefits include a maximum credit of $3,600 per child aged 5 or younger and $3,000 for children aged 6-17.

The unclaimed tax credits were discovered by United Way of Northern New Jersey’s research arm, United For ALICE, through analyzing the U.S. Census surveys between July and October 2021. The analysis revealed that 41% of ALICE and poverty-level households across the U.S. did not receive the advance Child Tac Credit payments they were due.

That rate was even higher in New Jersey, where 50% of eligible households did not receive the Child Tax Credit payments they were due.

These findings expanded on the IRS’ report that there are millions of households whose children had not been claimed on a recent tax return or do not appear on recent tax records and who may still be eligible to claim the expanded credit.

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

To help educate the public on tax credits and filing, United Way and its partners – the IRS, Norwescap, and Greater Providence Missionary Baptist Church – are offering free tax preparation and filing services year-round.

“In addition to helping residents benefit from any eligible tax credits, we also help them save the average $270 fee charged by paid tax preparers,” Gaudioso said.

Visit the United Way Free Tax Prep site here to access the “easy-to-use” online filing system.

Last year, United Way and its partners allowed 5,600 households to file their taxes for free, refunding $5.8 million and saving residents $1.5 million in tax preparation costs.

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