What the new $3,000 to $3,600 child tax credits mean for South Dakota parents

Your Money Matters

SIOUX FALLS, S.D. (KELO) — Parents across South Dakota may now be eligible for up to $3,600 in tax credits for each of their children. It’s part of the $1.9 trillion American Rescue Plan signed by President Biden Thursday.  

“Being a single mom it’s pretty tough, especially with this year, everything slowing down. It’s been kind of a rough year,” Sioux Falls mom Kathy Gonzalez said. 

Gonzalez says she was one of the lucky ones who was able to keep working during the pandemic while her daughter was out of school, thanks to a family member helping out.

“But I know some people that didn’t have anybody there and would have to not go to work or they were unemployed during the time,” Gonzalez said. 

“At the height of our food deliveries, we were serving 900 children per day, so we were definitely seeing families hurting for income, job loss, those sorts of things, and that’s a really hard thing to bounce back from,” Lisa Verdin with the Boys and Girls Club said. 

Verdin says many families faced childcare and employment issues over the last year that came with a big financial hit.

“As anybody could imagine, if you suddenly had no income for one month or two months or three months, that’s a huge hole for a family to dig out of,” Verdin said. 

The American Rescue Plan increases the child tax credit from $2,000 to $3,600 for children under six and $3,000 for each child age 6 to 17.

“Parents are paying anywhere from $8,000 to $10,000 per year for full-time child care. If you have multiple kids under the age of five, you’re doubling that, that’s a huge expense for parents,” Verdin said. 

Now beginning in July, families who qualify will get half of their tax credit as monthly cash payments; the remainder will be included with their 2021 tax return.

“I am a single mom so just to keep on building for our future I think that that would be helpful. There’s always cost of food and living, I think that would be helpful for a lot of families including myself,” Sioux Falls Mom Carly Helder said.

“It’s going to be a big help, like a very big help,” Gonzalez said.

Single taxpayers earning up to $75,000 and married couples earning up to $150,000 are eligible to receive the full $3600 or $3000 credit per child. Taxpayers earning above those thresholds will see reduced payments.

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