Child tax credit begins to hit American families’ bank accounts – .

Child tax credit begins to hit American families’ bank accounts – .

WASHINGTON (AP) – The Child Tax Credit had always been an empty gesture for millions of parents like Tamika Daniel.

That changed on Thursday when the first payment of $ 1,000 went into Daniel’s bank account – and dollars began to flow into the pockets of more than 35 million families across the country. Daniel, a 35-year-old mother of four, didn’t even know the tax credit existed until President Joe Biden extended it for a year as part of 1’s coronavirus relief program. , $ 9 trillion which passed in March.

Previously, only people who earned enough money to pay income tax could qualify for the credit. Daniel has spent almost a decade without a job because his oldest son has autism and needed her. So she got away with Social Security payments. And she had to live in Fairfield Courts, a public housing project that ends at Interstate 64 as the freeway passes through Virginia’s capital, Richmond.

But the extra $ 1,000 a month for next year could be life changing for Daniel, who now works as a community organizer for a Richmond nonprofit. It will help provide a security deposit on a new apartment.

“It’s actually just on time,” she said. “We have a lot to do. It certainly helps to lighten the load.

Biden presented the new monthly payments, which will average $ 423 per family, as the key to halving child poverty rates. But it also sets up a larger philosophical battle over the role of government and the responsibilities of parents.

Democrats see it as a historic agenda along the lines of Social Security, saying it will lead to better outcomes in adulthood that will contribute to economic growth. But many Republicans warn that the payments will discourage parents from working and end up fueling poverty in the long run.

Some 15 million households will now benefit from full credit. Monthly payments are $ 300 for each child 5 and under and $ 250 for those between 5 and 17. The payments are expected to expire after a year, but Biden is pushing to extend them until at least 2025.

The president ultimately wants to make the payments permanent – and that makes this first round of payments a test of whether the government can improve the lives of families.

Biden invited the recipients to the White House to mark the first round of payments, saying in a speech Thursday that the day had historic resonance because of the boost it will give families across the country.

“This would be the biggest one-year drop in child poverty in the history of the United States of America,” the president said. “Millions of children and their families, as of today, their lives are about to change for the better. And our country would be better off too.

Florida Republican Senator Marco Rubio, who successfully championed increased credit in 2017, said Democrats’ plans would turn benefits into an “anti-work welfare check” because almost any family can now claim payment, that parents have a job.

“Not only does Biden’s plan abandon marriage incentives and work requirements, but it will also destroy the child support enforcement system as we know it by sending cash payments to single parents without s. ‘ensure that child support orders are made,’ Rubio said in a statement Wednesday.

The administration disputed these allegations. Treasury Department estimates indicate that 97% of tax credit recipients have a salary or self-employment income, while the remaining 3% are grandparents or have health problems. The credit is also starting to gradually wane at $ 150,000 for joint filers, so there is no deterrent for the poor to work, as a job would simply give them more income.

Colorado Democratic Senator Michael Bennet said the problem was inequality. He said economic growth has benefited the richest 10% over the past decades as families grapple with rising costs for housing, child care and health care. He said his Colorado voters fear their children will be poorer than previous generations and that this requires the expansion of the child tax credit.

“This is the most gradual change ever to the US tax code,” Bennet told reporters.

Parenthood is an expensive business. The Ministry of Agriculture estimated in 2017, last year he released such a report, that a typical family spends $ 233,610 raising a child from birth to age 17. But the richest children invest much more in their education and education, while the poorest children are constantly at a disadvantage. Families in the top third of income spend about $ 10,000 more per year per child than families in the bottom third.

The Child Tax Credit was created in 1997 to be a source of relief, but it also became a driver of economic and racial inequality, as only parents who owed taxes to the federal government could claim its payment. integral. Academic research in 2020 found that about three-quarters of white and Asian children were eligible for full credit, but only about half of black and Hispanic children were eligible.

In the census tract where Daniel lives in Richmond, the median household income is $ 14,725, almost five times lower than the national median. Three out of four children live in poverty. For a typical parent with two children in this part of Richmond, the expanded tax credit would increase income by almost 41%.

The tax credit is as much about keeping people in the middle class as it is about helping the poor.

Katie Strelka, of Brookfield, Wisconsin, was fired from her job as a beauty and hair care buyer for the Kohl’s department store chain in September as the pandemic tightened its grip on the country. She and her sons, Oliver, 3, and Robert, 7, had to depend on her husband’s income as a consultant for retirement services. The family was already struggling to afford her husband’s kidney transplant five years earlier and her ongoing therapies before she was fired, she said.

With no prospect of employment, Strelka re-enrolled in college to study social work in February. Last month, she landed a new job as Deputy Executive Director of the nonprofit International Association of Orthodontics. Now she needs child care again. This equates to $ 1,000 per week for both children.

All of the tax credit money will be used to cover this, said Strelka, 37.

“Every little bit will help right now,” she said. “I pay for the school out of my pocket. I pay for the boys’ things. The cost of food and everything has gone up. We’re just really grateful. The tide feels like it’s turning.


Associated Press writer Todd Richmond in Madison, Wisconsin, contributed to this report.


This story has been corrected to show that the spelling of the Wisconsin mother’s last name is Strekla, not Stekla.


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