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After Only Two Months Without Receiving Any Payments From the Child Tax Credit, Families Are Once Again in Financial Difficulty

Two months have passed since families with children eligible for the child tax credit ceased receiving payments in December. Many of those families are already having financial difficulties.
ParentsTogether Action, an advocacy group, polled nearly 60 percent of parents who claimed that since the payments ceased, they haven’t been able to afford sufficient food. More than 800 members were surveyed in early February and found that an extra 22% claimed they could no longer afford to provide for their families’ basic requirements.
As a campaign director for ParentsTogether Action, Allison Johnson remarked, “These past two months have been a sort of perfect storm of everything coming together to make life even more difficult.”
As the epidemic continues to affect families and disrupt work and school schedules, inflation is at its worst level in 40 years, further burdening parents. At the same time, they’re seeing less money coming in each month, putting additional strain on their budgets.

Monthly CTCs advantages :-

The American Rescue Plan, enacted into law in March 2021 by the Biden administration, increased the child tax credit. A $600 bonus for children under six years of age was added to the current $3,000 child tax credit for the 2021 tax year. It also included six advance monthly payments that stretched from July to December and increased the number of people who could benefit from the programme.

Families utilised their first paycheck to buy necessities like food, clothing, and rent. As a result of the benefit, food insecurity and child poverty decreased in the US Census Bureau Household Pulse survey.

Additional evidence backed up these conclusions. 74% of those who received the credit used it for everyday expenses in December, according to a SaverLife poll, a non-profit that helps low-income Americans to save money. It was also discovered that families who received the child tax credit spent more money on utilities each month, indicating that the benefit allowed them to make up for missed payments, keep on top of their bills, or even pay for the future.

Child tax credit payments have had a direct impact on lower-income families, according to Radha Seshagiri, SaverLife’s director of public policy and systems change.

Families were also able to use the extra money to save or pay down debt. According to SaverLife, more than 80% of respondents stated that the child tax credit payments were critical to their financial stability.
77% of those polled by ParentsTogether Action said the payments made them feel less stressed about their finances as a result of the payments.
Those results are quickly being reversed if the credit is not continued.

‘Families were afraid that this would happen, and they were afraid of what it would mean for their future,’ Johnson said. In a heartbreaking way, we’re now witnessing that unfold in real time.

What’s coming up after that?

For the time being, it appears unlikely that the increased child tax credit will be extended. President Biden’s Build Better agenda included an extension, but legislation has stalled.

According to Johnson, families who received advance payments in 2021 must still file a tax return in order to receive the second half of the payout. When filing their taxes this year, the IRS recommends that individuals use the electronic filing option and choose direct deposit for their refunds.

In addition, people who often avoid filing taxes because they don’t make enough money should do so this year since they may be entitled to get the entire child tax credit in the form of a refund from the IRS. That might cost a lot of money for certain people.

There are a lot of families who are hurting right now, Johnson added.