Amid the economic turmoil caused by COVID-19 and the measures enforced to attempt to combat it, child tax credit payments are being talked up as a way to boost the financial heartache being felt across the United States.
The federal child tax credit program began to distribute payments on July 15, in what will be a monthly form of income.
Some households received the money directly into their bank accounts, while others were sent paper checks. In other cases, families have opted against these advance payments, instead preferring to collect all their 2021 child tax credits in one sum.
A boost to families
According to some experts, this government policy will serve to ease the burden amidst these financially uncertain times
“What I think makes this policy expansion both politically and economically feasible – and generally very good policy – is the fact that it’s targeted on families with children,” University of Maryland economist Melissa Kearney told CNBC.
“Frankly, this is one of the best ways the federal government can and should be spending money from the perspective of social return,” added Kearney.
Over 60 million children to benefit
According to the US Treasury Department and Internal Revenue Service, around 35 million families were recipients of the first of six monthly payments.
That equates to around 60 million children benefitting from 14.8 billion dollars, with the average sum equating to 423 dollars per family.
The scheme will provide 250 dollars for each child aged between 6 and 17, while each child under the age of six can receive 300 dollars per month.
Who is eligible?
In order to qualify for the full amount, taxpayers must be making 75,000 dollars per year or less while heads of households must be making no more than 112,500 dollars, while married couples who submit taxes together cannot be making over 150,000 dollars.
Concerns over the scheme are rooted in the fact that increased spending on such services will see a rise in inflation further down the line.
Additionally, this could lead to a universal basic income program, which comes with a variety of concerns and potential burdens on the state in the long-term.
However, Treasury Secretary Janet Yellen, while admitting spending will increase, believes that it will have a net positive impact.
“It certainly will add to spending, but most importantly, it provides support for families to be able to take care of the needs of children,” Yellen said in an interview on CNBC.