As child tax credit payments expire, many Maine families face 'hard choices'

Dec. 26—Samantha Donley has come to rely on the $300-a-month tax credit payment the federal government has been sending her family this year.

The checks help pay for things like child care for her 14-month son and gas for when she travels to Portland from Wilton three days a week to attend the University of Southern Maine.

While she has been in school, her family has lived on her husband's income and the leftover grant funding for her education. The expanded child tax credit is one of the reasons she decided to go back to school in the first place.

"It has definitely helped us," Donley said. "We've started planning it into our budget. Without it, it's going to make everything tighter in our household."

Those payments may be history for Donley and thousands of other Maine residents. Congress expanded the tax credit and distributed it in monthly payments as part of this year's American Rescue Plan Act. And under that law, the expanded credit expires this month and the last monthly check was sent to families on Dec. 15.

President Biden's Build Back Better bill includes an extension that would keep the checks flowing. But Congress failed to pass that measure before the holidays, and its prospects are uncertain.

There are roughly 200,000 children under the age of 18 in Maine whose families have benefited from the expanded credit, which was promoted by the Biden administration as a way to keep families from poverty as the pandemic has upended so many lives.

The Center on Poverty & Social Policy at Columbia University reported that the child tax credit reached 61.1 million children, lifting about 3.6 million kids out of poverty. A U.S. Census Bureau report found that most families were using the payments for necessities like food, rent and utilities.

While Biden's Build Back Better bill would extend the tax credit, the $2.2 trillion spending package was dealt a major blow when West Virginia Sen. Joe Manchin announced last week that he could not support it. With all 50 Republicans opposed, Democrats can't afford to lose even one vote in the evenly divided U.S. Senate.

In fact, the inclusion of the expanded child tax credit has been a key sticking point for Manchin. During private negotiations with the White House last week, Manchin said he would support a bill if the child tax credit was stripped, the Washington Post reported.

The White House has been firm in its belief that the child tax credit is paramount.

"Maybe Senator Manchin can explain to the millions of children who have been lifted out of poverty, in part due to the Child Tax Credit, why he wants to end a program that is helping achieve this milestone," press secretary Jen Psaki said in a statement Sunday.

Maine's senators are divided on the Build Back Better bill, with independent Sen. Angus King pledging support and Republican Sen. Susan Collins opposed.

Collins has, however, said she's open to overhauling the child tax credit program, something her Republican colleague, Mitt Romney, floated this week as a way to continue some form of monthly payouts. It's not clear what kind of support that might have.

Donley said she's not convinced many senators are thinking about people like her when they debate programs like the expanded child tax credit.

Roxy Kai-Petrovich, who lives in Woodstock with her husband and 8-year-old daughter, said her family, too, has benefitted greatly from the monthly tax credit payment.

Prior to this year, households received a tax credit of up to $2,000 when they filed their annual taxes, paid as a lump sum. Under the current plan that expires this month, families who make less than $150,000 have received $300 per month for each child age 5 or younger, and up to $250 for children ages 6 to17. Over the course of a year, that's as much as $1,600 more per child.

"Seeing that amount reduced will be pretty impactful for us," said Kai-Petrovich. "It's the difference between buying food and paying another bill some months. I think a lot of families with children could be put into places where they have to make these hard choices."

Lindsey Clancy of Kennebunk wrote in a newspaper column this month that the monthly child tax credit payments have been paying largely for child care costs for her two daughters, ages 3 and 8.

Both she and her husband work, but their child care costs totaled $18,000 last year. When the pandemic hit Maine in 2020 and forced their daughters' day care to close for two months, they had to decide whether to keep paying or risk losing their spots. They chose to keep paying, even though it meant stretching their budget in other ways.

"Our child tax credit payments, which started in July, have fully paid for our oldest child's after-school care. They have also given us the peace of mind to know that we have money to pay any emergency child care costs, such as if our daughters' day cares temporarily shut down," Clancy wrote.

The fate of Biden's Build Back Better bill will have many other repercussions beyond the tax credit. Among other provisions, it includes funding for universal prekindergarten for 10 years, an expansion of the Obamacare health insurance system, and hundreds of billions of dollars to combat climate change.

Biden said this week he is still confident that he and Manchin can reach a compromise on the bill, although it's not clear how any deal would affect the tax credit provision. The White House also has suggested that if Build Back Better fails to pass in time to resume payments in January, it might double monthly payments in February.