Stimulus Update: The 2022 Child Tax Credit Battle Rages On, Despite New Study Showing the Benefits for Kids and Families
Lawmakers are still battling over whether to extend the Child Tax Credit into 2022, despite the clear benefits that the monthly checks provide to families and children.
- The debate for the extension of the Child Tax Credit payments continues, despite the clear need.
- A new study shows that the November tax credit helped to keep millions of children out of poverty.
- When combined with other types of financial assistance, the tax credit money has had an even wider impact on families and children.
Have you received your sixth Child Tax Credit payment yet? If not, don't panic. The IRS began issuing the last round of Child Tax Credit payments on Dec. 15, and the money for the December Child Tax Credit payments should be making its way to you in the near future. If you receive a paper check, it can take an extra couple of weeks to receive the money. Other issues have also caused delays with direct deposit payments in the past, so be sure to keep an eye on your mailbox or bank account if you're still waiting.
But while December's tax credit money is likely still on the way for those who haven't received it yet, this month's check could be the end of the monthly Child Tax Credit checks. Lawmakers have still not come to an agreement to extend the enhanced tax credit benefits into 2022 for families and children in need. And, while there is still hope that they may come to an agreement, the reality is that the proposal for the extension faces quite the uphill battle in the Senate.
Still, while the 2022 Child Tax Credit extension is up in the air, study after study has proven how useful this extra money has been for low- to moderate-income families. And, as lawmakers continue to debate over an extension, yet another new study is proving the positive impact these monthly payments have had for families across the nation. Here's what this new study showed about the benefits of the monthly Child Tax Credit payments.
How the November Child Tax Credit payments helped families
The fifth monthly Child Tax Credit payment, issued in November, helped to keep 3.8 million children out of poverty, according to a new study from the Center on Poverty and Social Poverty at Columbia University. Per the study, the overall child poverty rate decreased from 12.8% in October to 12.2% in November, due in large part to the payments making it easier for households to pay for essential bills.
In total, that accounts for a 29.4% reduction in child poverty compared to what the monthly poverty rate would have otherwise been. This data mirrors what researchers over the last five months have shown: that the Child Tax Credit program has worked to keep between 3 million and 3.6 million children above the poverty line.
And, when combined with other types of financial help, like the Supplemental Nutrition Assistance Program (SNAP) emergency allotments, the Child Tax Credit money has had an even wider impact. Per the report, these emergency lifelines for families have helped to keep 5.1 million children out of poverty. The combination of these programs resulted in a 36% drop in child poverty for November compared to what they otherwise would have been.
Per the report, these new benefits have acted as a permanent social safety net for families in need rather than temporary assistance due to the pandemic. That alone makes it crucial that they continue past 2021, although lawmakers hold that ultimate decision in their hands.
What other studies have shown about the monthly Child Tax Credit payments
While this new study has provided more evidence of the benefits of the enhanced Child Tax Credit payments for families on the verge of poverty, it's hardly the only study to do so. Over the last five months, there have been numerous studies proving the benefits of the advance on the tax credit.
According to an earlier study from the Center on Poverty and Social Poverty at Columbia University, the first two advanced Child Tax Credit checks helped to lift about 3.5 million kids out of poverty. This new study shows that November's check helped to lift another 300,000 kids out of poverty, an increase from the earlier estimates.
Without the tax credit money, the monthly child poverty rate for August 2021 would have been a jaw-dropping 16.2%. With the addition of the tax credit payments, that rate was reduced to 11.5%.
Over the last six months, the advance payments have also helped families make ends meet in other ways by providing the means to fill pantries and empty bellies. After the July and August payments were issued, studies showed that the number of households with kids and adults reporting that they were facing a lack of food dropped by about 3.3 million.
The additional Child Tax Credit money has also cut down on financial anxiety for parents, which directly affects the children in these households as well. According to a recent survey from ParentsTogether Action, about 56% of families who received the first tax credit payment reported that the money helped to reduce their financial anxiety. This study also showed that most of the tax credit money went toward paying for basic household expenses, like food, utilities, rent, or childcare costs.
And, contrary to popular belief, the extra tax credit money has not encouraged parents to stop working. It has actually helped millions of parents to stay employed during the pandemic.
Per a recent report from Humanity Forward, about 94% of parents who received the Child Tax Credit money said they planned to continue working -- or planned to work even more. Only 6.4% of parents said they’d use the tax credit money to either work less or change jobs, and that percentage was made up primarily of parents with young infants or toddlers.
What these studies all have in common is they all show a clear need for a continuance of the expanded Child Tax Credit for low and moderate-income American families. Keep your eyes and ears tuned to news from the Senate, as they currently hold the fate of the ongoing credits in their hands.
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