What Are Parents Spending Their Child Tax Credit Money On?
More than $15 billion in child tax credit payments were sent to eligible families today, the U.S. Treasury Department and IRS announced, bringing the total to more than $61 billion in direct payments since July.
Today’s is the fourth monthly payment of the expanded CTC provided in the American Rescue Plan. Eligible families get a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 to 17.
See: New Study Shows the Advance Child Tax Credit Does Not Affect Employment Numbers
Find: Stimulus Qualification: Here’s How To Get the Child Tax Credit If You Had a Child in 2021
So where is all the money going? According to a Treasury Department press release, the Census Bureau’s Household Pulse Survey collected data on how middle-income American families spent their first payments. Here’s what it found:
55% spent their CTC payments on food
26% spent it on clothes
23% spent it on school and after-school costs
A more recent national survey from researchers at the Social Policy Institute found that 42% of CTC recipients planned to use at least some of the credit to start or grow a college fund for their children. Nearly one-quarter (24%) planned to use the payments for child-care expenses.
Another survey, conducted by researchers at the Columbia Center on Poverty and Social Policy, found that lower-income families tended to use the money for food. The initial payments were associated with a “25% decline in food insufficiency” among low-income families with children.
See: How To Use the Child Tax Credit Update Portal
Find: Stimulus Update: Haven’t Received a Child Tax Credit Payment? Check If You’re Eligible
“It’s clear this tax relief is meaningfully improving the lives of children in every corner of the country, which is why Congress must act to extend it so these monthly payments don’t end after December,” Deputy Treasury Secretary Adewale Adeyemo said in a press release.
Two more advance CTC payments are scheduled for this year — one on Nov. 15 and one on Dec. 15. The December payment will be the final one under the expanded CTC unless Congress acts to extend it, the Treasury Department said.
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Last updated: Oct. 15, 2021
This article originally appeared on GOBankingRates.com: What Are Parents Spending Their Child Tax Credit Money On?
