Here’s What Families Are Actually Using the Child Tax Credit to Pay For
The senator from West Virginia has cited the bill’s cost and its potential to exacerbate inflation. He has also said he wants there to be a work requirement to receive the benefit and to limit payments to those making less than $200,000 annually. “I want social reforms to the point that [there is] responsibility and accountability,” he said in an interview with MetroNews on Monday.
Overwhelmingly, people who have received the child tax credit payments have used it for food, rent, and utilities and to pay off debt, data from the U.S. Census Bureau has found.
The credit functions as an advance for the tax refund two-parent households making less than $150,000 per year receive. Parents and caregivers get up to $300 per month for every child in their household under six and $250 per month for each older child. Families received the last of the six installments on December 15. The White House is exploring doubling payments in February, if legislation to extend the benefit passes.
So far, the majority of households making less than $50,000 per year are putting the payments toward debt, an August survey by the U.S. Census Bureau found. Higher income families were more likely to be saving the money.
Another report from the Center on Budget and Policy Priorities found 91% of households making less than $35,000 per year used the money to pay for food, shelter, clothing and other necessities. Black and Hispanic families were more likely to use their credits on education-related costs, such as school supplies.
The Biden administration has touted the initiative as a way to reduce child poverty. A study from Columbia University found that making the payments permanent could reduce child poverty in the U.S. by 40%. After the first credits went out in July, food insecurity in households with kids dropped from 11% to 8.4%, the Census bureau found.
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