Tamika Grace has barely caught her breath since the COVID-19 pandemic hit.
A single mother of two young daughters, the 43-year-old Bridgeport woman has had to navigate a year of remote schooling, reduced work hours and unexpected expenses.
“Having to move last-minute, when you think you’re already managing just from the stimulus checks…it threw a monkey wrench in my plans,” she said.
In the next few weeks, though, crucial financial relief is coming her way. Through a dramatically expanded federal child tax credit program—a key component of President Joe Biden’s $1.9 trillion coronavirus relief package—Grace expects to start receiving roughly $500 per month through the end of the year, followed by a $3,000 lump sum when she files her 2021 taxes.
“I can catch up on all these bills,” she said.
The payments are the result of a sweeping one-year expansion of the child tax credit that is expected to cut child poverty in half. In Connecticut, the economy has been slow to bounce back since the Great Recession—and the pandemic dealt a further blow to many workers, said Lauren Ruth, the research and policy director for Connecticut Voices for Children, a research and advocacy organization based in New Haven. Troublingly, child poverty is also on the rise in Connecticut.
For each qualifying child age 5 or younger, families will generally receive six monthly payments of $300, followed by a lump sum of about $1,800. For children ages 6 to 17, families will generally receive six monthly payments of up to $250 and a later lump sum of about $1,500. Exact payment amounts depend on one’s tax filing status, adjusted gross income and number of dependents.
Previously, child tax credits were distributed at the end of a financial year, as a tax deduction or lump sum check—and only available to certain households. But the revised tax credit will be available to a broader range of low and middle-income households and families can receive half of the total credit amount in monthly payments, with the rest available upon filing their 2021 tax return.
The expanded child tax credit has been described as one of the most significant anti-poverty measures in America in decades. As a single provision, it is projected to reduce child poverty from nearly 14% to 7.5%, according to a Brookings Institution analysis.
In March, when the American Rescue Plan was sent to Biden’s desk, the moment was particularly meaningful to Congresswoman Rosa DeLauro, D-3rd District. She has spent nearly two decades championing an expanded child tax credit.
“Franklin Roosevelt lifted seniors out of poverty, 90% of them with Social Security, and with the stroke of a pen, President Biden is going to lift millions and millions of children out of poverty in this country,” she said at the time.
In Connecticut, roughly 832,500 children qualify for child tax credits under the expanded program, an addition of about 100,000 children through the American Rescue Act, according to data from Connecticut Voices for Children.
The impact of those extra funds, researchers and leaders say, will be far-reaching.
“This has been a difficult year and families with children have been struggling,” said Beth Bye, commissioner for the state Office of Early Childhood. “People have lost their jobs or have had hours cut back, and this is saying, ‘You can catch your breath and pay your bills as you wait to get your earnings back up.’”
A parent with two children age 5 and under can expect to receive an extra $600 per month through the end of the year.
“That’s your food, or that covers half your mortgage,” Bye said. “That’s huge.”
In the North End of Hartford, Crystal Pitts, 57, lives with her daughter and 5-year old granddaughter. A few extra hundred dollars each month would go a long way in their household, she said, helping them to pay their utilities and keep their fridge stocked.
Right now, they prioritize buying her granddaughter, Abriana, the food she likes to eat. But there’s so much more they wish they could afford.
When the pandemic swept through Bridgeport last year, Grace said she didn’t fully process what the pandemic and stay-at-home orders had taken from her family until she watched her youngest daughter stand at the window and break down.
“She just started screaming at the window that she wanted to go outside and see her friends, because she didn’t understand why she couldn’t go back to school,” she said.
This summer will be different, in large part due to the monthly payments she expects to receive. Grace plans to put most of the money toward bills and may even use some of it to take her girls to a water park, so they can have fun and shake off the hardship of the past year.
“The extra funds will definitely be helpful,” she said.
Eligible families who filed a 2019 or 2020 tax return or have used the Internal Revenue Service portal to receive stimulus checks do not have do anything to receive the child tax credit payments, said Laura O’Keefe, director of family financial stability for the Village for Families and Children in Hartford. But parents can choose to opt out of the monthly payments and receive the larger credit during next year’s tax season.
Most parents who did not file taxes are still eligible for the tax credit and can enroll through the IRS portal for non-filers, O’Keefe added. She encouraged residents of low- and moderate-income households to contact the Volunteer Income Tax Assistance (VITA) Program, which offers free tax assistance.
Eliza Fawcett can be reached at firstname.lastname@example.org.