For those Americans who have received their $1,400 coronavirus stimulus checks under the American Rescue Plan, much of the funds already have been spent on covering basic living expenses like groceries and rent and paying down outstanding debt.
And if these Americans are still suffering financially, they can rejoice in knowing that come July 15, eligible parents will be in line to receive monthly payments from the new child tax credits.
Thanks to President Joe Biden’s $1.9 trillion legislation, the stimulus bill enabled the expansion of child tax credits that generally allowed families to claim a credit of up to $2,000 for children under the age of seventeen.
Now, amid the ongoing pandemic, they have been extended to even more families—and they are eligible to collect as much as $3,600 per year for a child under the age of six and up to $3,000 for children between ages six and seventeen. What this means is that qualified parents can net a $250 or $300 payment each month through the end of the year.
“The American Rescue Plan is delivering critical tax relief to middle class and hard-pressed working families with children. With today’s announcement, about 90 percent of families with children will get this new tax relief automatically, starting in July,” Biden said in a statement.
“While the American Rescue Plan provides for this vital tax relief to hard-working families for this year, Congress must pass the American Families Plan to ensure that working families will be able to count on this relief for years to come. For working families with children, this tax cut sends a clear message: help is here,” he added.
So, how will the child tax credit money be spent? According to some financial experts, it appears that they will be spent in a similar fashion as the third round of stimulus checks.
A recent report by LendingTree revealed that nearly 20 percent of Americans admitted that they were using the latest stimulus funds for basic expenses—but a whopping 50 percent were tapping into the checks to pay down outstanding debt.
“Paying down debt should absolutely, positively be a priority for folks who are struggling with debt,” Matt Schulz, chief credit analyst at LendingTree, said in a statement. “People should continue to put stimulus money, if they can, toward paying down high-interest debt like credit cards.”
Other polls, though, are still suggesting that many Americans are still relying heavily on stimulus payments to meet basic everyday needs.
According to a survey conducted by Bankrate, it found that a majority of the stimulus funds continue to be spent on groceries, rent, and mortgage. Furthermore, only 13 percent of respondents said the checks would be spent on discretionary purchases, such as eating out at restaurants or taking a vacation.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.
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