Child Tax Credit 2021: Here’s How Families Say They Will Use “Children’s Basic Income”

Parents of 60 million U.S. children began receiving monthly checks through the Extended Federal Child Tax Credit, a historic aid measure intended for low-income families. The money is badly needed given the lingering financial strains caused by the pandemic, some parents told CBS MoneyWatch.

How people might use the funds has sparked debate, with some critics calling it a “middle class boondoggle” or fearing it will discourage low-income parents from looking for work. Supporters say the measure is essential at a time when households face increase in shopping prices, gas and other necessities as well as the lingering financial impact of the pandemic.

Seven parents who spoke to CBS MoneyWatch said they plan to spend the money on goods and services for their children, ranging from back-to-school supplies to extras like gymnastics lessons for a teenage girl who aspires to join her pom team. – cheerleaders in high school. Many also expressed hope that monthly payments would continue beyond December, when the last check is due to hit the accounts.

“Right now I was in dire straits, wondering if I would have her things or her food for back to school,” said India Hatcher, 37, a police dispatcher who lives in Atlanta and receives $ 250. per month under the CTC for her. 11 year old son. “I can get his uniforms, his supplies and that helps – it’s not a million dollars, but for some people like me who don’t have anyone, it’s very helpful.”

The IRS said it sent $ 15 billion in CTC checks on Thursday, with nearly 9 of 10 payments deposited directly into recipients’ bank accounts. Eligible families with children under 6 will receive $ 300 per child, while families with children aged 6 to 17 will receive $ 250.

Some households are at risk of missing payments, especially low-income families who are not required to file federal income tax returns. The IRS relies on tax returns to determine eligibility.

“Even if you don’t have to file an income tax return, you are eligible,” said Radha Seshagiri, director of public policy and systems change for SaverLife, who recently found in a survey that parents who do not report no taxes were almost twice as likely to be misinformed about eligibility compared to those submitting returns.

The CTC is a tax benefit that helps “everyday Americans,” said Carrie Joy Grimes, CEO and Founder of WorkMoney, a non-profit financial advocacy group.

CTC checks come at a crucial time for many parents, as their spending tends to be higher in the second semester when kids return to school, noted David Newville of Code for America, who started a site. called GetCTC.org. which aims to help parents learn about payments.

“There is a great need for people with children,” Newville said. Getting a monthly check “frees families to make the best choices for children.”

Here is how seven families say they will choose to use CTC money.

India Hatcher, 37: back to school supplies

Hatcher of Atlanta said the pandemic had increased its costs. “A parent’s lifestyle is more expensive. A child needs a computer at home, as we said last year.

“With $ 250 a month, it’s $ 1,500 until December, and if I don’t need all of that in a given month, I can carry it over to the next month. If you save $ 50 a month, in December you could have extra Christmas gift for your child or money for winter clothes.

“I know some people will lower it because they see it as just another document. I don’t understand how that is possible since we are working adults, and I don’t know of any parent in the world who couldn’t use $ 250. more for their child. “

Tammy Gorollo, 34: Tutor and gymnastics lessons

Gorollo lives in Annandale, New Jersey, with his partner and two daughters, ages 7 and 13. Gorollo said his family is still recovering after their construction company, All Problems Solved Home Maintenance, lost customers to the pandemic.

Getting $ 500 a month for her daughters will help pay for extras to help them excel in school, she said. “We went from being completely stable to completely broke. I had to go to pantries – it was hard for us. We are doing better than at the worst time of the pandemic. We can pay the bills and manage to pay the bills. rent and buy food, but there is nothing more we can do.

“My younger daughter has special needs, so I wanted to hire a private tutor to help her catch up. My older daughter competes and needs to learn gymnastic techniques. We have lived tight and didn’t have any extra money for it.

“Knowing that it happens every month, that we can trust it – I love that fact, especially doing something for the kids.”

Sabrina Smith, 36: Daycare and diapers

Smith of Port Clinton, Ohio, said her family suffered a financial blow from the pandemic when her husband, a musician, lost his job. As the main breadwinner, Smith works in his family’s manufacturing business, which has kept the family on a solid footing. But she said the $ 600 monthly payments for a newborn baby and toddler would go a long way.

“We’re not rich at all, but it’s still a big help. The daycare costs $ 720 per month. [for a 23-month-old child]. I have a newborn baby, so she’s going to join daycare. The price will go up, so the money we get for her will go to daycare. Just with diapers, wipes, the essentials that you need to buy on a regular basis, it’s incredibly useful.

“We live in such a partisan age, which is so unfortunate because helping kids do better has nothing to do with politics. It’s such a useful thing for kids and families. You can get naysayers. , but I think it’s a It’s such a good start for our country which is so behind “in helping families.

Mike DeRubis, 44: School support, bills

DeRubis, a sales manager from De Forest, Wisconsin, has two teenage boys. He said he would use the monthly check for $ 500 to pay for car repairs and to provide educational support for his youngest child, who is autistic and is homeschooled. DeRubis also volunteers for universal basic income groups.

“These children’s checks are like a basic income for the children. It would provide some economic security for families. The $ 500 a month is going to be huge.” The money will help pay for “educational things that we think are worth it”.

“Because we get this extra support, I’m going to double [their allowance] – it will be like a basic income for them. I think they will be delighted. “Automatic payments” give people more agency and more flexibility to choose what they want to do. Cash Payments say, “We trust you to do what you need with the money. “

Rebecca Fry, 39: A car to take her daughter to dates

Fry lives in Orlando, Florida with her mother, who is undergoing cancer treatment, and her 16-month-old daughter. She lost her job before the pandemic, but finds it dangerous to return to work given her mother’s weakened immune system and because her daughter is too young to get the vaccine.

“The money itself would be a big help. I’m trying to save money to buy a vehicle to take my daughter to doctor’s appointments and do the basics.”

“The only type of work I could do was remote work, and I had no luck or success finding legitimate remote work jobs, so I just took care of my mom and dad. daughter – basic caregiver and company help. “

“I would like to see [the CTC] continue indefinitely. “

DeShawn Macer, 30: Child care expenses

Macer lives in Bergenfield, New Jersey with his girlfriend, their three-year-old son and his mother. His girlfriend works remotely, but it can be difficult with their son at home.

“We had a babysitter when the pandemic hit – it was $ 150 a week, and we talked about child care, but it’s expensive. So for now, we hope to use the CTC for the daycare. ”

The $ 300 payment would pay “maybe a third” of the monthly cost of the daycare, Macer said. “$ 300 is just a small part of the iceberg, but it would definitely help. That’s why I see they are pushing for it to be long term. “

John Kulik, 65: Private education

Kulik lives in Bellmawr, New Jersey, with his wife and six children, five of whom are eligible for payments (oldest is 18, above the 17 age limit to receive a check). The $ 1,250 in monthly payments will allow her to send two more of her children to private school this fall.

“In my situation, it’s a godsend – I’m currently unemployed due to COVID. It will help me while I get back on my feet with a job elsewhere. My two oldest children were in a private school – the public education system [in Bellmawr] is not good. With this additional payment, I will be able to put all my children in [private school]. They are absolutely excited. “

“I see no good reason to keep the payments until the end of the year when you get the lump sum of your tax refund. If they continued those payments beyond December, I would love that. “