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Child tax credit ‘is going to make a difference.’ Families plan how they’ll spend extra cash.

Child tax credit ‘is going to make a difference.’ Families plan how they’ll spend extra cash.

FINANCIAL NEWS

Child tax credit ‘is going to make a difference.’ Families plan how they’ll spend extra cash.

Dental work for her daughter. Extra lessons for her son. Repairs for the family car.  Lily Marquez, 40, says those are her first spending priorities for the expanded child tax credit that could add as much as $7,200 to her family’s tight budget this year.”We’re living paycheck to paycheck,” says Marquez, whose husband’s $65,000 a year salary provides for their family of four living in San Francisco. “We’ve made sacrifices. We’ve prioritized rent, and food and those necessities. That additional money is going to make a difference for us.”The American Rescue Plan, passed in March, gave a temporary boost to the child tax credit, increasing the amount of money low- and moderate-income families will receive and the number of children and households who are eligible for it this year.The law increases the credit to $3,000 for each child age 17 and under, and to $3,600 for each child under age 6. Families will receive an advance equal to half that amount in monthly checks of $250 or $300 that begin rolling out in July and continue through December. Lily Marquez, a married mother of two, in San Francisco, Calif.We’re living paycheck to paycheck. We’ve made sacrifices. We’ve prioritized rent, and food and those necessities. That additional money is going to make a difference for us.The full credit  will be available to parents who are single and earn under $75,000 a year, married couples who file jointly and earn annual income of less than $150,000, and single “head of household” filers who make less than $112,500 a year. Also, families who did not previously qualify for the refund because they had little or no tax obligation will now be able to receive it. The new law’s financial impact will be significant, cutting the number of children living in poverty by over 40%, according to the Center on Budget and Policy Priorities. Advocates say the child tax credit is a much-needed economic safety net.  It “will provide direct support to children and families to help pay for the basic expenses of raising children, like food, rent or mortgage and utilities,” says Julie Kashen, director of women’s economic justice and senior fellow at The Century Foundation, a progressive think tank. “Along with investments in comprehensive child care …early learning policies and paid family and medical leave, these policies will help children and families not only get by, but also thrive.” When Marquez got her family’s 2016 Honda Odyssey serviced recently, it cost nearly $900, an amount she had to charge to a credit card.”The July child tax credit will go toward that,” she says of the bill. It “was a lot of money for us, but we had to get it done … Unexpected costs like these are what cause the most stress during these already hard times.”TOP: Lily Marquez, a married mother of two makes dinner for her family in San Francisco, Calif. on June 25, 2021. BOTTOM: Lily Marquez, a married mother of two, on a walk with her family in San Francisco, Calif. on June 25, 2021.
TOP: Lily Marquez, a married mother of two makes dinner for her family in San Francisco, Calif. on June 25, 2021. BOTTOM: Lily Marquez, a married mother of two, on a walk with her family in San Francisco, Calif. on June 25, 2021.
LEFT: Lily Marquez, a married mother of two makes dinner for her family in San Francisco, Calif. on June 25, 2021. RIGHT: Lily Marquez, a married mother of two, on a walk with her family in San Francisco, Calif. on June 25, 2021.
RACHEL BUJALSKI FOR USA TODAYMarquez and her husband, Jose Goussen, should receive $3,600 each for their four-year-old daughter, Mia Isabella, and five-year-old son, Jeremiah. They plan to use what remains of their tax credit for “things …we’ve been putting off because we didn’t have the ability to afford it,” she says. That includes dental work for their daughter , and support services for their son , who fell behind academically during the COVID-19 pandemic.“That money will go towards whatever our kids need to become healthy,” she says. “It’s not a lot to some people … who already make a six-figure income, but that’s not our case.”     Aqeela Muntaqim, a 32-year-old married mother of four in Macomb, Michigan, says her household income of $140,000 a year comes from her husband’s earnings as a boiler operator, as well as her job as deputy director of Mothering Justice, a nonprofit organization that advocates for mothers of color.Show caption
Hide captionAnwaar Muntaqim ll, 7, Aqeela Muntaqim, Aaliyah Muntaqim, 5, Zala Ra Muhammad, 6, Naeema Muntaqim, 1, Anwaar Muntaqim Sr., and Naseer, 10 of Macomb pose…
Anwaar Muntaqim ll, 7, Aqeela Muntaqim, Aaliyah Muntaqim, 5, Zala Ra Muhammad, 6, Naeema Muntaqim, 1, Anwaar Muntaqim Sr., and Naseer, 10 of Macomb pose for a photo at their home in Macomb on Sunday, June 27, 2021.Rodney Coleman-Robinson, Detroit Free PressShe also works in sales and as a travel agent. But “because of COVID … we saw a huge loss of income,’’ Muntaqim says.The family’s tax credit should add up to $1,100 a month, money Muntaqim intends to spend on child care and groceries. She’ll also be buying new school clothes and winter gear for her sons, ages 10 and 7, and her daughters who are 5 and 1.But the extra money won’t just go toward necessities.“We’re taking our first vacation in two years,’’ Muntaqim says, adding that they’re planning a trip to Mexico. “And we also really do want to save some of it because after what happened last year … we really want to have a little nest egg.’’Still, some note that the tax credit can only stretch so far.Marquez says she likely won’t have enough extra cash to cover the high costs of child care in San Francisco. Without it, she can’t go back to work.And Muntaqim says the tax credit will not bridge the broader wealth gap that negatively affects many Black Americans. Aqeela Muntaqim, a 32-year-old married mother of four in Macomb, MichiganEven though I do think that expanding the credit is going to help a lot of Black mothers who have had extreme losses of income … obviously it’s still not enough to really have a significant economic impact in our community.“Even though I do think that expanding the credit is going to help a lot of Black mothers who have had extreme losses of income, whether they lost their jobs or they had to quit or take a lower-paying job to provide for their families, obviously it’s still not enough to really have a significant economic impact in our community,’’ she says. But Muntaqim, who administers a mother’s group on Facebook, says her conversations with other parents make it clear that even a few extra dollars can be meaningful, and not just to cover basic expenses.”I do know that some people want to take their kids to have some fun this summer,” she says. “And a lot of the moms are using the funds for some self-care. A lot have been spending their income on their children … and the household and haven’t had much income to take care of themselves, whether it’s getting their hair done, or a facial or a massage.”Here’s what you need to know about Biden’s newly expanded child tax creditBiden increased child tax credit payments under his American Rescue Plan. Here’s the latest on how much you’ll get and when you’ll get the payments.Just the FAQs, USA TODAYThe pandemic was stressful mentally as well as financially for many working families, Muntaqim adds, so it makes sense to spend some of the extra money on a little relaxation and joy.”If you’re the person who’s been working 60 hours a week,” she says, “and you’re finally getting a little extra income where you can finally take a break and breathe … I’ve told moms don’t be ashamed to buy yourself an outfit or take yourself out to dinner.”Follow Charisse Jones on Twitter @charissejonesStories like this are possible because of our subscribers like you. Your support will allow us to continue to produce quality journalism.Stay up to date by signing up for one of our newsletters.Sign upPublished
4:07 am UTC Jun. 30, 2021
Updated
4:07 am UTC Jun. 30, 2021


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