Parents with student loans can lose money
Some parents who have defaulted on their federal student loans may have part of their child tax deduction seized during this tax season, according to CNBC.
There are about 9 million borrowers in default, the business noted. Half of these are parents with dependent children, which is the population entitled to the child tax deduction, according to a 2019 report issued by the Institute for College Access and Success.
Although monthly installments of the credit paid from July to December 2021 were protected against outlays for federal debt, this is not the case for the rest of the credit paid as a tax refund.
However, refunds received before May 1 are protected thanks to the federal student loan break, CNBC reported.