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The federal government is set to roll out new child tax credit payments this week. Families can get up to $300 per month, per child.
In some cases, the payments could provide immediate relief for necessities, like food or clothes. But for more and more families, the money could provide a first opportunity for investment in kids’ futures, beyond the next grocery story run.
This summer, Elyssa Schmier with the advocacy group MomsRising will be adding a new dependent to the family.
“Very, like, nerdy tax way of saying I’m having a baby,” she said.
That means Schmier will be eligible for the child tax credit. She’s already thinking of putting it toward child care.
“But then you have diapers and additional doctors visits and onesies to buy,” she said, also noting that some mothers she’s surveyed are considering a college fund.
Other families have a different plan.
“They’re using their child tax credit to either repair an existing vehicle, to upgrade and get a second vehicle, and that allows now a two-income household to actually have two incomes. And that’s a long-term investment,” Schmier said.
Hilary Hoynes, a University of California, Berkeley, economist, said mobility can lead to other changes that matter.
“You know, get your child to school, get them to their well checkups, small actions that aggregate up to the potential for long-term effects,” she said.
The best historic example of that, Hoynes said, is nutrition assistance. Her research has found that better diets for young kids help them succeed in school and lead to increased earnings in adulthood.
However, this new tax credit goes beyond food.
“It’s going to go to what the family thinks is the best use of the money,” Hoynes said.
Another group doing outreach about the tax credit is United Way of Santa Cruz, California. CEO Keisha Browder said most parents she talks to are still getting their heads around the credit in the first place.
“To see the eyes of shock, like, ‘Whoa, this is happening in our community.'”
Browder said she wants to help families learn to save, especially those receiving stable income for the first time.
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