Over 30 million U.S. households received up to $300 per child last month, according to The Wall Street Journal. This has cut childhood poverty in the country and left many looking forward to the extension into 2022. Since the extension expired, many American families are now concerned about how they will manage without the monthly child tax credit payments.
According to Yahoo, most households will receive an increased tax credit value of $3,000 per child for 2021 as a result of the expanded credit. Half of the tax credit was paid to families as monthly payments, and the other half will be credited to them on their 2021 tax returns. According to WSJ, these advance payments are often used for basic expenses.
Many families (51%) spent their monthly child tax credits on food for their families, (36%) made payments on bills, and while on clothing and other essentials for their children (30%) spent here.
This is according to a report produced by researchers from Washington University of St. Louis and Appalachian State University. A 30% drop in food insecurity was also observed after the first payment. Monthly payments were also frequently used to pay off debt and build savings.
In its article, the WSJ pointed out that after the expanded credit went out, the percentage of families with children reporting not having enough to eat fell from 11% to 8.4%. According to the Wall Street Journal, the JPMorgan Chase Institute analysis of banking data showed that families receiving the credit had 65% more in their pockets at the end of September than two years ago.
“Extending the expanded credit and making the child tax credit fully available on a permanent basis to families with low incomes would improve children’s lives in the near and long term and benefit society overall,” stated the Center on Budget and Policy Priorities.