by 5 minutes Reuters (Reuters) – A Starbucks supervisor in Brooklyn who aspires to be a doctor will pay the rent and put money aside for her son. Across the country, a college-bound mother in the San Francisco area is resuming her studies now that she can more easily afford after-school care for her youngest child. FILE PHOTO: Chantel Springer walks in Brooklyn, New York, with her son Jasiah, on July 29, 2020. The photo was shot on July 29, 2020. REUTERS/File Photo/Brendan McDermid As part of a significant extension of the child tax credit, roughly 39 million U.S. households might profit in a variety of ways once they begin getting monthly federal payments on Thursday. According to Columbia University’s Center on Poverty and Social Policy, the expansion might cut child poverty in the United States by up to 45 percent. The strategy is unique for its broad reach – the checks released this week are expected to reach over 90% of U.S. children, according to IRS estimates – as well as the fact that half of the money is distributed monthly rather than in one lump sum at tax time. “It’s really giving families the help they need right now to help fulfill some of their fundamental needs,” Mario Cardona, chief of policy and practice for the advocacy group Child Care Aware of America, said. The program is being compared to a universal basic income for children because it is not confined to low-income families. The entire credit is available to single parents earning up to $75,000 and couples earning up to $150,000. Families will get up to $3,600 for each kid under the age of six, and $3,000 for those aged six to seventeen, thanks to amendments made by the American Rescue Plan, which was passed in March. The credit was made completely refundable and the minimum income requirement was lifted, making it more available to parents who do not work and those with minimal tax payments. Expanded credit, according to critics, is costly and may discourage people from working. However, supporters argue that the funding will enable more parents to work by helping them pay for child care. This year’s $105 billion growth will come to a conclusion. It is being pushed by President Joe Biden and other Democrats to be extended. Rep. Jackie Speier, co-chair of the Democratic Women’s Caucus, stated, “It’s perhaps the most profound measure on behalf of children in our country.” “It’s like a child’s Social Security.” Showcase ( 3 images ) THE MONEY IS USED BY THE PARENTS AS THEY SEE FIT. Chantel Springer, 25, plans to put the $300 she’ll get from the tax credit toward the rent on the Brooklyn apartment she lives with her mother and three-year-old son this month. Springer, a Starbucks shift supervisor who is studying biochemistry and aspires to be a doctor, intends to put the money in a savings account for her kid beginning next month. In the fall, Jess Hudson’s two children, ages 10 and 14, will return to traditional schools. She’ll also return to university to finish her political science bachelor’s degree. The $500 she will receive each month will pay the majority of her 10-year-old son’s $585 monthly after-school care costs. “Being able to have that money now so that we can walk back into the market, so that we can step back into job and education, I can’t even overstate how essential that is,” Hudson, 36, said. Hudson plans to work in public policy after graduating in December and then attend law school. Michelle Rodriguez, 39, used credit cards to assist pay for the increased grocery bills and internet costs she faced after her three sons, ages 5, 6, and 7, began attending virtual school in their San Diego home. Rodriguez, who works with families fleeing domestic violence, said the $800 she will receive monthly from the child tax credit will allow her to begin paying off some of her debt now rather than waiting until next tax season. It will also bring some financial respite at a time when money is normally scarce. Her annual tax refund savings usually run out by the end of the summer. “I’m able to breathe a little easier now,” she said. DISTRIBUTION OBSTACLESFamilies who do not file taxes or have not received pandemic relief checks from the IRS may be required to sign up in order to receive the funds, raising concerns that the program will not reach all families in need. Some parents are concerned that receiving a portion of their tax credit will cause them to overspend next year. Annie Watson, a 33-year-old early childhood education consultant in Kansas City, is putting aside $1,100 in advance payments for her four children, ages one, five, seven, and eleven. The couple generally owes taxes each year and she predicts they may break even after receiving the expanded tax credits – meaning they may need all or part of the income they’re receiving now to pay their tax bill next year. Officials from the Obama administration have stated that they are collaborating with nonprofits and grassroots organizations to conduct outreach and raise awareness about the program. By filling out an online form with the IRS, families can opt out of receiving advance payments. Watson expressed her gratitude for having the cash on hand in case of an emergency, especially since it appears that her husband will need to leave his job as a baker later this year when she resumes her travel schedule. Jonnelle Marte contributed reporting; Trevor Hunnicutt contributed additional reporting; Donna Bryson and Alistair Bell edited the piece./n
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