Child tax credits may lift thousands in Detroit out of poverty, 'no strings attached,' mayor says

Mike Martindale
The Detroit News

Detroit — Detroit Mayor Mike Duggan told eligible families Monday that federal child tax credit funds may “lift many city residents out of poverty.”

Duggan said he estimates 90% of Detroit families with children will be eligible for the funds, "no strings attached."

Starting Thursday, $3,000 to $3,600 per child is available to eligible families this year under the American Rescue Plan that President Joe Biden signed in March, Duggan said in an address to explain the credit. The credit will provide residents who qualify with monthly checks. The plan was designed to ease families' financial strain worsened by the pandemic.

President Joe Biden signs the American Rescue Plan, a coronavirus relief package, in the Oval Office of the White House, Thursday, March 11, 2021, in Washington.

A family with three children younger than 17 may qualify for more than $10,000, Duggan said. Those with an income of $75,000 or less or a married couple with a combined $150,000 income, also are eligible for money.

The plan is expected to ease child poverty by more than 40%, according to the Brookings Institution.

Residents must file federal income tax returns for 2019 or 2020 or be signed up to receive a stimulus check from the Internal Revenue Service, Duggan said, before receiving monthly checks for half of the 2021 Child Tax Credit this year in their bank account on July 15. The remaining credit comes when taxes are filed next year, according to whitehosue.gov/child-tax-credit/.

Those without bank accounts will receive checks at the same address they received their stimulus checks or at the address on file with the IRS. Children must have Social Security numbers.

“With this one-time tax credit, President Biden and our congressional delegation have given Detroit families an extraordinary opportunity to significantly increase their income this year, and in many cases, be lifted out of poverty,” Duggan said, noting it is estimated that at least 20,000 children in Detroit and their families will be affected by the program.

“We are going to do everything we can as administrators to make sure every eligible family in our city is able to take advantage of this incredible opportunity. Some people can’t believe it's true because we have never seen anything like it. And we may never again. But tell your friends and families they may have money coming.

"We need to reach out to people. It's estimated 90% of Detroit families with children will be eligible for these cash payments, and there are no strings attached." 

Children born or adopted by Dec. 31 are eligible to be counted as tax credits, providing they reside with the recipients for at least six months of the year. While only one person can claim a child tax credit as a dependent on income tax filings for a year, relatives who care for children or claimed them as tax deductions for part of a year also are eligible for that period.

The tax credit checks do not affect other forms of public service, Duggan said, and are not considered to be income or a tax refund.

Duggan’s address was livestreamed on the city’s website and Facebook, and can be viewed at the city website, detroitmi.gov. For questions, call 2-1-1 or visit websites where experts are available to provide answers, including www.irs.gov/ChildTaxCredit, UnitedWaySem.org/taxes or GetTheTaxFacts.org.

Duggan said two qualified IRS tax preparing agencies, the Accounting Aid Society and the Wayne Metro Community Action Agency, would provide free tax filing services for people with incomes under $57,000.

People who want to file their own tax statements can take advantage of online software and a free helpline at (866) 698-9435 between 10 a.m. and 10 p.m., he said.

“Let’s make sure we get every dollar in the city that we can,” Duggan said. “For some children and families, this can be life changing. For a few months at least.”

mmartindale@detroitnews.com

(248) 338-0319