Using Child Tax Credits to Overcome Financial Hurdles

Many families are eagerly awaiting Congress's decision on whether to expand the child tax credit under the Tax Relief for American Families and Workers Act of 2024. Financial experts suggest that this tax credit could result in a substantial tax refund or deduction, potentially amounting to nearly $2,000 per child. Leveraging these funds effectively could help families overcome various financial barriers and progress towards economic stability, noted Joyce James, founder of the Middleburg Institute.

Since October, this nonprofit organization has been hosting child tax credit awareness workshops, covering topics such as advocacy, financial literacy, mental health, and leadership. The objective is to educate residents about the economic benefits of tax credit policies, especially as they expand in Louisiana. Garrett Ganucheau, Vice President of Business Development at EFCU Financial, emphasized the importance of using tax refunds wisely. He suggested that paying off debts could significantly improve individuals' financial health and credit scores. Additionally, he recommended considering share-secured loans and credit cards to rebuild credit effectively. Ganucheau also highlighted the significance of saving, mentioning high-yield savings accounts and share certificates as valuable tools for achieving financial goals, whether it's purchasing a home, building an emergency fund, or saving for education.

While the Tax Act awaits approval in the Senate, taxpayers are encouraged to file according to the 2023 provisions, as outlined by David Lindenfeld from the Together Baton Rouge Tax Fairness Team. The current law offers a maximum credit of $2,000 per child under 17, potentially providing significant relief for eligible families.