'Working parents are very deserving of this help': New tax credit could be game changer for families, advocates say
Jul. 25—TUPELO — Local advocates say federal monthly payments that began rolling out this month to families nationwide as part of an expanded Child Tax Credit could be a gamechanger for working class families across the state.
"There's no doubt that it will help those families who have children," said Susan Hayden, founder of Falling Through the Cracks, a Tupelo-based nonprofit that aids working single parents. "The majority of the people I work with, they do manage what they make as best as they can, so I see a huge benefit for those people."
On July 15, more than 35 million households nationwide began receiving monthly payments of $250 or $300 per child as part of an expansion to the Child Tax Credit. In Mississippi, more than 360,000 families will receive approximately $153 million in advance tax credits as part of the American Rescue Plan approved in March.
The payments will cover roughly 595,000 children in Mississippi, according to a White House fact sheet.
The expanded tax credit raised the age limit from 16 to 17 and increased the credit from $2,000 per child to $3,000 per child for children over the age of 6 and $3,600 for children under the age of 6. Working families that make $150,000 or less for a couple, or $112,500 or less for a single-parent family, will automatically be eligible for the full credit.
Eligible families will receive up to $250 each month for every child 6-17 years old and up to $300 for every child under 6 years old. The monthly payments are being pushed as a step to address child poverty, as low-income families, who typically received smaller child tax credits than higher-income households, can receive the expanded credit amount.
Automatic eligibility and higher threshold is key for the types of families Hayden's organization serves. The CREATE Foundation special project provides long-term support to single parents who don't normally qualify for aid according to the poverty guidelines. Often, the families FTTC serves will request aid when unexpected costs appear. Many are nominated by family members or friends rather than directly applying themselves.
Most of the organization's efforts help their beneficiaries pay off large debts like medical bills or student loans. They also offer budget counseling to help families manage their expenses.
Hayden believes the child tax credit could help families with the expenses of having a child.
"I'm excited that they're going to have (assistance) given to them without them asking for it," Hayden said. "Working parents are very deserving of this help, this tax credit."
The child tax credit could be a boost for some households who are struggling to provide for their households, said LIFT, Inc. Executive Director Dorothy Leasy.
LIFT, Inc. serves households who meet federal poverty and grant guidelines by offering rental, utilities, food, energy, and other needs-based assistance. The Belden-based nonprofit typically serves over 4,000 households, ranging from 8,000 to 10,000 individuals, annually through its regular services across eight counties.
The organization expects to serve 6,000 households this year. Child care is always a concern for the single-parent households LIFT, Inc. serves, but affordability became an increased worry during the pandemic.
Leasy views the expanded tax credit as a real boon for many families.
"Whereas they were already receiving tax credit at the end of the year during taxes, it always came in handy," she said. "That was always a boost for them. As long as you can work with them and they use it for the betterment of the household, that's going to be great for them."
Leaders of the Boys & Girls Clubs of North Mississippi —{/strong}an afterschool program that serves every child, regardless of income — also see the challenges facing working families. For the 1,236 youth the organization served in 2020, 67% qualified for free or reduced lunch, and 50% live in single-parent households. As a result, the clubs have a regular practice of providing low fees, waiver forms for parents who cannot afford services and scholarships.
According to Boys & Girls Clubs of North Mississippi CEO Zell Long, the organization will work to raise awareness of the child tax credit by making information about the program available to the parents they serve.
"For us, we definitely want (to help) parents and households, if they are eligible for additional financial assistance (that) definitely will help them buy groceries or food," Long said. "The statement is, 'to help bring them out of poverty.' That's what we want for all our club members that fall within that category."
Monthly payments through the expanded child tax credit will continue through 2021. President Joe Biden is seeking to extend it for another five years, per the American Families Plan. Hayden believes the current child tax credit could help provide for families in an area where normally churches, charities and nonprofits have to step in to fill the gaps.
She already saw the potential impact of additional government resources play out among the families she serves. In a typical year, FTTC can see up to 20 single working parents. During COVID-19, FTTC only saw five eligible applicants, which Hayden believes could be a result of stimulus payments not making them as needed.
While Hayden expects requests to rise again, she believes more focus is necessary for working parents.
"Even if it weren't right after the pandemic when this is happening, to me, it's a need all the time," Hayden said.
The Associated Press contributed reporting.
