Initial Parent Perspectives on the Child Tax Credit Advance Payments

Brief

Initial Parent Perspectives on the Child Tax Credit Advance Payments

Abstract

The expansion to the child tax credit (CTC) enacted through the American Rescue Plan Act could significantly change the landscape of child poverty. As policymakers and other stakeholders debate the future of the expanded CTC, the voices and perspectives of families with children should be front and center in the public dialogue. To learn more about families receiving the CTC and the early impact of the advance payments on their households, shortly after the first payments went out in July we interviewed 20 parents who had at least one child under age 6 and reported an income below 250 percent of the federal poverty level. Their stories provide early insights into how the CTC is helping families meet basic expenses and providing a buffer against further hardship. Specifically, we find the following:

  • 16 out of the 20 parents reported receiving the credit at the time of the interview.
  • 13 parents prefer receiving monthly payments; 4 prefer receiving single year-end payments.
  • 9 parents anticipate their primary use of the monthly payments will be essential bills, and 8 anticipate primarily using it for emergency funds or savings.
    • A few parents identified specific uses for the funds, including an expensive emergency room visit or a replacement for a broken air conditioner.  
  • 0 parents felt that receiving the payments would induce them to work fewer or more hours at their jobs.
  • We observed some issues around nonreceipt, such as that parents
    • lack a bank account to receive the direct deposits,
    • assume they are ineligible for the CTC because they hadn’t filed a tax return,
    • lack clarity on whether foster children are eligible, or
    • lack of clarity on eligibility more generally.
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