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For many American families, the monthly child tax credit payments provide much more than just cash—they’re providing financial stability and peace of mind.
President Joe Biden expanded the child tax credit with the American Rescue Plan in March. It was improved in several ways:
- It increased the credit by up to $1,600 per child.
- 17-year-olds qualified for the credit for the first time.
- Qualifying parents and caregivers could opt to receive half of the credit in monthly advance payments rather than just a credit or refund come tax time.
Now, as lawmakers negotiate the Build Back Better plan, a $1.75 trillion investment in America’s social safety net, the fate of the expanded child tax credit lies in their hands. But for some families, continuing to receive these monthly payments will mean the difference between becoming homeowners sooner or being able to put food on the table.
These payments, which can be as much as $300 per month per qualifying child, are being described as “one of the most effective anti-poverty programs ever.” They’ve cut child hunger rates for 3.3 million households and lifted 3.5 million children out of poverty within the first two months of being implemented.
Here’s how three families are using their monthly child tax credit payments—and what continuing to receive them in the future would mean for their family.
A Faster Path to Homeownership
Tamara Sykes, 30, and her husband spend nearly $1,000 on child care expenses for their three-year-old daughter each month. They’re part of the one out of four families using their monthly CTC payments to help cover child care costs.
Sykes and her husband, who live in Columbus, Ohio, are both employed and collectively earn around $120,000 per year. Before they started receiving the monthly payments, affording child care seemed difficult at times, like when Sykes got laid off from her job and when she realized how much money they’d need to save for a down payment on a home.
Now, they’re accelerating their savings so they can buy a home and move out of their apartment —something they believe is crucial for the growth and health of their family.
“Having a home isn’t easy, but for us, it’s also a way to secure a future for [our daughter],” Sykes says. “It’s nice to know there will be some type of asset to pass down for her.”
The monthly payments help Sykes see clear progression toward their down payment goal …….
Source: https://www.forbes.com/advisor/personal-finance/families-using-monthly-child-tax-credit-payments/