‘I can breathe a little more’. Millions of children receive their first tax credits on Reuters

By Jonnelle Mars

(Reuters) -A Brooklyn Starbucks (NASDAQ 🙂 manager who wants to be a doctor will pay the rent and create savings for his son. Across the country, a mother from San Francisco who is going to college is returning to class so she can more easily pay for school care after her youngest child.

These are just some of the ways in which 39 million U.S. households began to benefit from their monthly federal checks, which began as part of a massive expansion of children’s tax credit. According to Columbia University’s Center for Poverty and Social Policy, the expansion could lift 5 million children out of poverty and reduce the U.S. child poverty rate to 45%.

The outlook is remarkable, both for its wide range (checks issued this week will reach nearly 90% of U.S. children, according to estimates by the Internal Revenue Service), and instead of distributing half a penny a month during tax.

“It’s really providing the support they need to help families meet some basic needs,” said Mario Cardona, Child Care Aware of America, the advocacy group’s policy and practice leader.

The program, which is not limited to low-income families, is being equated with universal basic income for children. Single parents earning up to $ 75,000 and partners between $ 150,000 can receive full credit.

Under the changes to the American Rescue Plan approved in March, families will receive $ 3,600 for each child under the age of 6 and $ 3,000 for children between the ages of 6 and 17, more than $ 2,000 per child. The minimum income requirement was removed and the credit can be fully refunded, making it more affordable for working parents and those with low tax bills.

Critics say extended credit is expensive and can discourage people from working. Proponents say the fund could help more parents work to pay for child care.

The $ 105 billion expansion will expire by the end of this year. President Joe Biden and other Democrats are stretching.

“It’s probably the most profound measure in favor of our country’s children,” said Representative Jackie Speier, president of the Democratic Women’s Caucus. “It’s Social Security for Children.”

PARENTS USE MONEY BECAUSE THEY SEE THE RIGHT

Chantel Springer, 25, will use the $ 300 she will receive from the tax credit this month to help pay the rent for the Brooklyn apartment she shares with her mother and three-year-old son. Starting next month, Springer, a shift manager who is studying biochemistry and wants to become a doctor, plans to save the money in a savings account for his son.

Jess Hudson (NYSE:) ‘s two children, ages 10 and 14, are re – studying in the fall. He will also return to campus to complete his bachelor’s degree in political science.

The $ 500 she will receive each month this year will cover the maximum cost of $ 585 a month in after-school care for her 10-year-old son. “Now that we can have that money back in the economy, we can go back to work and school, I can’t even see how important that is,” said Hudson, 36, who wants to work in public after graduating from politics in December and finally going to law school. .

Michelle Rodriguez, 39, turned to credit cards with her three children ages 5, 6 and 7 at her San Diego home after switching to a virtual school to help cover food bills and Internet expenses.

The $ 750 he receives each month from his children’s tax credit will help him start paying off part of that debt instead of waiting for the next tax season, said Rodriguez, who works with families fleeing domestic violence.

It will also provide some peace of mind during a time when it is usually financially tight. The savings you receive with your annual tax return usually run out in the fall.

“I can breathe a little more,” he said.

DISTRIBUTION OBSTACLES

Families who do not file taxes or who have not received checks to alleviate the IRS pandemic will need to register to receive the money, raising concerns that families who are concerned about the program may not be able to arrive properly.

A senior Biden administration official told reporters on Wednesday that only about 35 million families would receive the July payment because some families had not yet registered. But the administration hopes it will soon get the IRS estimate to reach 39 million families.

Some parents are nervous that receiving a portion of their tax credit could throw them off budget next year.

Annie Watson, a 33-year-old Kansas City early childhood education counselor, saves $ 1,100 in advance for her husband and husband for four, five, seven, and 11-year-olds.

The couple owes taxes every year and believes they can break even after the tax credits are increased – they need part or all of the money they are now receiving to pay the tax bill next year.

Administration officials said they are working with nonprofits and grassroots organizations to disseminate and raise awareness about the program. Families can opt out of receiving advance payments by filling out a form online through the IRS.

Watson added that in the event of an emergency, cash will be available, especially as it appears that the husband will have to leave work at a bakery this year when he returns to work.