That money has already gone a long way to ensure that the country's children have enough food. The number of adults living in households with kids that reported not having enough to eat has fallen by 3.3 million, a reduction of about a third, since the benefit started, data from the latest Census Bureau's Household Pulse survey showed.
The latest survey was conducted between Aug. 4 and Aug. 16, meaning that it reflects the impact of the first payment, which went out in July, and may show some of the benefit from the second payment, which was sent out to families Aug. 13.
"The improvement in food hardship among families with children after the child tax credit payments was truly remarkable," said Claire Zippel, senior research analyst at the Center for Budget and Policy Priorities and author of a recent report on the topic. "Such a dramatic increase really indicates that we're on the right trajectory in terms of helping provide families with the resources that they need."
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More kids are getting the credit
The American Rescue Plan in March expanded the existing child tax credit, adding advance monthly payments and increasing the benefit to $3,000 from $2,000 with a $600 bonus for kids under the age of 6 for the 2021 tax year.
The first half of the credit is being delivered in monthly direct deposits through December of $300 for children under 6 and $250 for those aged 6 to 17. The second half will come when families file their 2021 tax returns next year.
The enhanced credit also made the money – and monthly payments – available to some 27 million children who either previously got partial credit or missed out on the benefit because their families didn't earn enough income. (Previously you would have needed to have $2,500 of earned income to qualify for the partially refundable credit. Now, you need zero income to qualify for the entire credit.)
"It's not just that some families that were already receiving the credit are now seeing larger amounts," said Zippel. "It's also that we have a significant number of the lowest incomes who are newly eligible for the credit for the first time."
That's been especially beneficial to Black and Latino households, who've been hit hardest by the pandemic, she said.
The rate of food hardship, or not having enough to eat, declined to 15% from 20% among Black adults with children, to 13% from 21% for Latino adults with children and to 13% from 22% for American Indian, Alaska Native, Native Hawaiian and other Pacific Islander adults with children, according to the latest data.
In the same timeframe, the rate of food hardship among white adults with children fell to 7% from 10%, and it declined to 4% from 6% for Asian adults with kids.
Families with household income below $25,000 were more likely to spend the money on necessities such as food, utilities, clothing, rent or a mortgage or school supplies.
Families will continue to get the monthly benefit via direct deposit or paper checks through the end of the year. There's still time for those who weren't auto-enrolled through a tax return to sign up for the benefit, including the monthly payments, through the IRS.
So far, the enhanced credit and monthly payments are only for the 2021 tax year, meaning the benefit will cease unless extended by Congress.
"If we want to continue making progress like this, Congress needs to make it a top priority to extend these monthly payments and to ensure that children in families with the lowest incomes can receive the full credit," said Zippel.
Currently, Democrats are working on writing their $3.5 trillion spending plan, which includes extending the child tax credit among other safety net programs. Committees are responsible for having their pieces of the legislation ready by Sept. 15.
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