Willard McGruder tries to find time to close his eyes for a few moments every morning. At 67, he did not expect to be raising kids again.
“I’m on pins and needles,” he said. “I haven’t had kids in what, forty-something years?”
McGruder, of Overbrook, has been taking care of his 3-year-old grandson, Rahine, who has autism, as well as 9-year-old Keshawn, since their mother was arrested two years ago. Keshawn is “a really smart kid” who loves to zone out chatting with friends online. But Rahine needs constant, hands-on attention. He doesn’t talk, and slams his knuckles against his head when upset.
“You just can’t stand still with him, because he will get an attitude real quick,” said McGruder, after soothing one of his grandson’s recent tantrums. Each school day, the pair pace the block before a bus takes Rahine to preschool at 8:30 a.m.
“When he’s at school, that’s the only time I get rest,” said McGruder.
Like nearly one in four Philadelphians, McGruder and his grandsons live in poverty. A retiree, he said he receives approximately $1,400 a month in Social Security. It would be enough for just him, but covering expenses for three people is tough. Still, he makes too much to qualify for cash assistance.
Monthly checks from the expanded child tax credit (CTC) would vault the family over the poverty line. But like many eligible Philadelphians, McGruder hasn’t been getting them.
After going through an identity verification process with the Internal Revenue Service, he’s expecting to finally receive the tax credit cash his grandsons are owed in a couple of weeks. He hopes to put a chunk towards a new bedroom set for Keshawn.
“I have to be patient, like I have to be patient with my grandson,” he said.
As debates over extending the massive poverty-relief program teeter on the edge of an uncertain political future in D.C., McGruder’s experience highlights what’s been a wider struggle: getting money touted as a gamechanger to those who need it most.
Few places stand to be as transformed by the Biden administration’s expanded child tax credit as Philadelphia.
The city has consistently had the highest poverty rate of America’s 10 biggest cities, currently at 23%, according to the U.S. Census Bureau. More than one-third of children in the city live in poverty, and 21% live with hunger, according to the child advocacy group Save the Children.
By providing an income floor to families, the child tax credit “has the potential to essentially wipe out the most extreme forms of poverty,” said Patrick Cooney, assistant director for Policy Impact at the University of Michigan’s Poverty Solutions Initiative.
For each child under six, parents get $3,600 a year. That number drops to $3,000 for children ages 6-17. These payments cover a large swath of families, from parents with no income at all, to joint filers making a combined $150,000/year. Half of the total subsidy is supposed to be paid monthly July through December, with deposits going directly into bank accounts. The other half can be claimed as part of 2021 tax returns.
In Philadelphia, federal and city estimates show this cash could pull as many as 75,000 residents above the poverty line, cutting deep childhood poverty by half.
But, to do that, the money needs to reach the people who are the least connected to the IRS. Nearly 14,000 children in the city are at risk of not getting the credit because their guardians don’t regularly file taxes, according to the IRS estimates from this summer.
As a remedy, city officials began an outreach campaign, but because IRS tax return data is anonymous, they were left to guess where to target their efforts.
They began with lists of families that had accessed other social services for their children in the last year and a half. So far, the Philly Counts call center dialed 22,000 people and texted 37,000 numbers, according to the city’s Office of Community Empowerment and Opportunity (CEO).
Out of that group, 1,300 people responded saying they were not receiving CTC and wanted help. Nearly 550 people made appointments to get help from the Campaign for Working Families, a non-profit offering free tax preparation. More than a thousand people used GetCTC.org to sign up if they do not normally file taxes.
Through those combined efforts, city officials said they have helped around 1,600 families who otherwise were not signed up get the tax credit — potentially leaving the bulk of those considered most at risk for not getting the cash empty-handed.
National data also shows that race is a factor. Despite having a lower poverty rate overall, White children are rising out of poverty faster as a result of the tax credit than Black, Latino or Asian children are, according to an analysis by Columbia University’s Center on Poverty and Public Policy.
A spokesperson for the IRS said it could not share city-level data yet, so the full picture of who is getting the money, and who still needs it, is not clear.
In the meantime, the city continues its outreach attempts.
“We won’t be done until every family that’s eligible gets access to the credit that they deserve,” said Beth McConnell, director of policy with the CEO. She stressed that a new program would take time to reach full potential.
In addition to the need for more awareness, shifting family structures and housing instability have been obstacles for many families who stand to benefit the most from the money.
One common reason a tax return or CTC application gets rejected is someone else is already claiming the child on a tax return.
“Some of our clients know exactly who it is or they think they do, [but] a lot of our clients don’t,” said Jen Burdick, supervising attorney with Community Legal Services of Philadelphia. The IRS does not provide that information. In some cases, domestic violence comes up as a complicating factor, said Burdick.
Working with the IRS presents its own challenges. In some cases, parents or guardians must prove to the agency they are who they say they are, a process that can take several months.
Willard McGruder was one of those people.
Kyra, a single mom of two in Montgomery County, also continues to be blocked from the benefit. Keystone Crossroads is withholding her last name at her request due to a recent domestic violence incident. She filed her taxes in March, but has not received any stimulus or CTC payments because the IRS sent her a letter in August asking her to verify her identity.
She said she hasn’t been able to, but not for lack of trying. “It’s completely impossible to verify my identity online, and then when I call, I’m calling at 7 o’clock in the morning, I’m sitting on hold,” she said.
Eventually, the call just drops. “I don’t hang up, the call hangs up,” said Kyra.
IRS data shows the federal agency’s call centers are overwhelmed. Only one in 50 calls to the income tax return hotline were answered this year, according to the National Taxpayer Advocate. Kyra, whose children are 1-and 2-years-old, said she was doing fine without the money, and working, until the domestic violence incident. Since then, she lost her job at a warehouse because she no longer has another person with whom to share childcare responsibilities.
“Not getting [the payments] before was a nuisance … but now I’m in a situation where I need the money,” she said. The $600 per month her kids qualify for would make a huge difference in her being able to earn some income while affording part-time childcare without completely running out of cash. Kyra said she cannot depend on family support, and was living in a shelter before.
Despite her frustration, Krya is a step ahead of some eligible parents. She knows about the credits and is advocating for herself. Many others remain in the dark due to what some see as a branding problem.
“The word ‘tax’ it’s a turnoff,” said Wanda Abdullah, one of the call center workers trying to get Philadelphians enrolled in the program. At a recent roundtable with Mayor Jim Kenney and U.S. Department of Treasury Deputy Secretary Wally Adeyemo, Abdullah explained that it’s confusing for people to look to the tax system to give them money.
“They might have read about it, they might know about it, but they still don’t understand,” she said.
Another potentially hard-to-reach group are kids whose parents were born outside of the U.S., and those who do not have permission to work in this country. Undocumented immigrants pay tens of billions in taxes each year, from sales taxes to income taxes, according to the Institute for Taxation and Economic Policy. Their kids can still qualify for the tax credits if born in the United States.
But doing so involves more paperwork, and even more waiting. Without a social security number, immigrants must apply for an Individual Taxpayer Identification Number, or ITIN, to file a tax return.
“Those children are eligible, but there’s no trace of their parents,” said Marcos Lomeli, program director with the Latino community-based advocacy group Ceiba.
Ceiba, located in Kensington, is one of a handful of providers working with immigrants to do this paperwork in Philadelphia. They helped parents of 93 kids use ITIN to file last year’s taxes.
In late October, Rosa and Jose were applying for ITINs in Ceiba’s offices while their kids Helen, 2, and Patrick, 3, played nearby. The couple is from the Dominican Republic, and asked that their last names not be used because they do not have work authorization in the United States. They were starting the paperwork, in order to eventually receive tax credit payments and start saving up to buy a house.
Jose works in restaurants and was not consistently employed during the pandemic, when the couple also feared bringing the virus home to their kids.
The money from the federal program “would be very, very helpful for us,” said Rosa.
‘I want more’
Under the Build Back Better Act, the expanded child tax credit would continue to flow to all low-and middle-income households with kids, no matter how little they make, through 2022.
But the legislation faces an uncertain future in Congress.
Some Democrats have been pushing to extend the credits until at least 2025. Amid skepticism, party leaders delayed a vote on the bill to analyze the impact on taxpayers, after moderates like Joe Manchin criticized the cost of the overall package. Most Republicans oppose the tax credit expansion, saying the relief is not targeted enough and will drive up government spending. All GOP members of the Pennsylvania delegation voted against the existing version earlier this year.
But for the families already getting it, the money is changing lives.
Antonia Gunter of Northeast Philadelphia had been subsisting on welfare for a couple of years when she started receiving the credit. Pre-pandemic, she had quit her job as a hospice nurse to take care of her son Bryan, 9, who has special needs, in addition to her 6-year-old twins, Gabriella and Isabella.
When she first received the tax credit, she took her daughters to the Jersey Shore for the day, as a treat during a pandemic with few bright spots. She also fixed her car and caught up on bills. The comfort that came with less day-to-day money stress empowered her. She soon decided that she needed to work again.
“I couldn’t live off of welfare,” said Gunter. “It was no life.”
She took a job as a residential counselor, a kind of home-based aide for people who need help with daily tasks. The salary started at $15 per hour. Gunter has plans to save for her own home.
As a sacrifice, she spends less time with Bryan, who she had been visiting several times a week at the residential facility where he lives. But, she said it was a necessary change to take care of her family.
“Because of the child tax credit, I was able to get some type of reality back to how we used to live before the pandemic,” said Gunter. “I got a little taste of it and I want more.”
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