NASHUA, N.H. (AP) — Christina Darling finally replaced her 2006 Chevrolet Equinox after it broke down several times while picking her children up from day care. But the 31-year-old mother of two was struggling to keep up with the car payments.
Brianne Walker desperately wanted to take her three children and two siblings camping for the first time but wasn’t sure how she could pay for it. After all, she was behind on her rent, and day care and grocery costs were adding up.
Then, the two women from New Hampshire got a surprise in their bank accounts this month. They qualified for the expanded child tax credit, part of President Joe Biden’s $1.9 trillion coronavirus relief package. Families on average are getting $423 this month; the Treasury Department estimates that 35.2 million families received payments in July.
“The additional money does help alleviate the pressure,” said Walker, 29, who took custody of her two siblings last year after her mother overdosed. The $800 credit will help make up for losses she incurred after quitting a kitchen design job to care for the five youngsters, ages 3 to 19.
Biden increased the amounts going to families and expanded it to include those whose income is so little they don’t owe taxes. The benefits begin to phase out at incomes of $75,000 for individuals, $112,500 for heads of household and $150,000 for married couples. Families with incomes up to $200,000 for individuals and $400,000 for married couples can still receive the previous $2,000 credit.
In the past, eligible families got a credit after filing their taxes — either as a lump sum payment or a credit against taxes owed. But now six months of payments are being advanced monthly through the end of the year. A recipient receives the second half when they file their taxes. The credit is $3,600 annually for children under age 6 and $3,000 for children ages 6 to 17. Eligible families will receive $300 monthly for each child under 6 and $250 per older child.
Advocates argue the monthly payments make more sense for low-income families.
“One of the problems with the big check in a year, if your car broke six months before, that is a long time to wait,” said Michael Reinke, executive director of the Nashua Soup Kitchen & Shelter, which serves many families making less than $26,000 a year.
“When people have money over a consistent period of time, it’s easier to make sure it’s going to the expenses you really need,” he said. “Sometimes, if you get it all at once, it’s hard to budget.”
Robin McKinney, co-founder and CEO of the CASH Campaign of Maryland, a Baltimore nonprofit organization that helps low-income residents file taxes, said the credit is providing people money in their pockets now, when they need it most.
“We know right now that peoples’ hours are down or they’re still struggling to get back to the same level of income that they had before, and this will create some stability for those families to know that over the next six months that they’re going to be getting this payment,” McKinney said.
If all the money goes out, the expectation is that could significantly reduce poverty — with one study estimating it could cut child poverty by 45%. And it comes at a time when unemployment benefits are being phased out and the federal eviction moratorium is set to expire Saturday.
The payments are also a test case of sorts. Biden ultimately would like to make them permanent — and the impact they have could go a long way to shaping that debate later this year.
“It infuses money into the family home,” said Suzanne Torregano, director of Family Services at Kingsley House in New Orleans, who estimated that 85%-90% of the parents the group serves are getting the monthly payments.
Still, some advocates argue the money may never reach the neediest because their incomes are so low they aren’t required to file a tax return, they don’t have a fixed address or bank account, or don’t have the internet savvy to apply.
