NASHUA, N.H. — Christina Darling finally replaced her 2006 Chevrolet Equinox after it broke down several times while picking her children up from day care. But the 31-year-old mother of two was struggling to keep up with the car payments.<\/p>\n
Brianne Walker desperately wanted to take her three children and two siblings camping for the first time but wasn’t sure how she could pay for it. After all, she was behind on her rent, and day care and grocery costs were adding up.<\/p>\n
Then, the two women from New Hampshire got a surprise in their bank accounts this month. They qualified for the expanded child tax credit, part of President Joe Biden’s $1.9 trillion coronavirus relief package. Families on average are getting $423 this month; the Treasury Department estimates that 35.2 million families received payments in July.<\/p>\n
\u201cThe additional money does help alleviate the pressure,\u201d said Walker, 29, who took custody of her two siblings last year after her mother overdosed. The $800 credit will help make up for losses she incurred after quitting a kitchen design job to care for the five youngsters, ages 3 to 19.<\/p>\n
Biden increased the amounts going to families and expanded it to include those whose income is so little they don’t owe taxes. The benefits begin to phase out at incomes of $75,000 for individuals, $112,500 for heads of household and $150,000 for married couples. Families with incomes up to $200,000 for individuals and $400,000 for married couples can still receive the previous $2,000 credit.<\/p>\n
In the past, eligible families got a credit after filing their taxes \u2014 either as a lump sum payment or a credit against taxes owed. But now six months of payments are being advanced monthly through the end of the year. A recipient receives the second half when they file their taxes. The credit is $3,600 annually for children under age 6 and $3,000 for children ages 6 to 17. Eligible families will receive $300 monthly for each child under 6 and $250 per older child.<\/p>\n
Advocates argue the monthly payments make more sense for low-income families.<\/p>\n
\u201cOne of the problems with the big check in a year, if your car broke six months before, that is a long time to wait,\u201d said Michael Reinke, executive director of the Nashua Soup Kitchen & Shelter, which serves many families making less than $26,000 a year.<\/p>\n
\u201cWhen people have money over a consistent period of time, it’s easier to make sure it’s going to the expenses you really need,\u201d he said. \u201cSometimes, if you get it all at once, it’s hard to budget.\u201d<\/p>\n
Robin McKinney, co-founder and CEO of the CASH Campaign of Maryland, a Baltimore nonprofit organization that helps low-income residents file taxes, said the credit is providing people money in their pockets now, when they need it most.<\/p>\n
\u201cWe know right now that peoples\u2019 hours are down or they\u2019re still struggling to get back to the same level of income that they had before, and this will create some stability for those families to know that over the next six months that they\u2019re going to be getting this payment,\u201d McKinney said.<\/p>\n
If all the money goes out, the expectation is that could significantly reduce poverty \u2014 with one study estimating it could cut child poverty by 45%. And it comes at a time when unemployment benefits are being phased out and the federal eviction moratorium is set to expire Saturday.<\/p>\n
The payments are also a test case of sorts. Biden ultimately would like to make them permanent \u2014 and the impact they have could go a long way to shaping that debate later this year.<\/p>\n
\u201cIt infuses money into the family home,\u201d said Suzanne Torregano, director of Family Services at Kingsley House in New Orleans, who estimated that 85%-90% of the parents the group serves are getting the monthly payments.<\/p>\n
Still, some advocates argue the money may never reach the neediest because their incomes are so low they aren’t required to file a tax return, they don’t have a fixed address or bank account, or don’t have the internet savvy to apply.<\/p>\n
\u201cWhat we are finding is that homeless families \u2026 while many of them are eligible for the tax credit, they have significant barriers to obtaining it,\u201d said Larry Seamans, president of FamilyAid Boston, which serves 900 families daily.<\/p>\n
\u201cWe have some counter-intuitive struggles of families who may be unfamiliar with tax forms, tax laws and the fact that by filing a tax return, you can actually get money to support your family,\u201d Seamans said.<\/p>\n
\u201cMany families … are not on the tax rolls. They now have to find sufficient documentation to prove that they are eligible.\u201d<\/p>\n
Families who do receive the credit are mostly spending it on rent, child care and groceries, as well as catching up on cellphone and other bills. For Darling, the $550 she gets will go to car payments, more fresh produce and a babysitter so she can attend Nashua Board of Education meetings. She is running for a seat on the board. Eventually, she hopes to put money aside to save for a home with a yard.<\/p>\n
\u201cEvery step closer we get to a livable wage is beneficial. That is money that gets turned around and spent on the betterment of my kids and myself,\u201d said Darling, a housing resource coordinator who had been supplementing her $35,000-a-year salary with monthly visits to the Nashua Soup Kitchen and Shelter’s food pantry.<\/p>\n
McKinney, who is married with a 5-year-old son and qualifies for the tax credit, is getting $167 a month. She said it\u2019s all going to help pay for child care, which costs $288 a week.<\/p>\n
\u201cRight now, it\u2019s out-of-school time because it\u2019s the summer, so people have to pay for camps and babysitting support so that the parents can go to work,\u201d said McKinney, of Columbia, Maryland. \u201cI know a lot of people who are like: \u2018This money is coming at just the right time, because this summer is more expensive for me for child care.’\u201d<\/p>\n
Many families in higher-income brackets who receive less money are socking it away for things like a family trip, school supplies or Christmas gifts.<\/p>\n
Carleigh Steele, who received several hundred dollars, said the money is giving her peace of mind a month after she moved into a house in Baltimore with the help of Habitat for Humanity.<\/p>\n
\u201cIt\u2019s sitting in my bank account for all the home-buying things that I need, and for the rainy day fund for my house \u2014 just to make sure that I can keep myself economically stable,\u201d said Steele, who has a 6-year-old daughter.<\/p>\n
Brianne Epps, a mother of four from Jackson, Mississippi, is using the money to pay bills but also to finance her dream of opening a soul food catering business. \u201cIt will help me, for one, to promote my catering business \u2014 to get that off the ground,\u201d she said.<\/p>\n
Molly Vigeant, of East Hartford, Connecticut, a 25-year-old single mother who works as a special needs paraprofessional in a high school, hopes to spend the money to repair or replace her car. But she’s had trouble accessing a portal aimed at helping applicants and hasn’t yet received anything.<\/p>\n
\u201cIt doesn\u2019t hurt yet,\u201d she said of the delayed payment. \u201cBut, it\u2019s a 20-year-old car with over 200,000 miles on it and I make 20 grand a year. A new one is not going to fall from the sky, when your debt-to-income ratio is garbage and you know you can\u2019t finance a car.\u201d<\/p>\n
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Associated Press writers Brian Witte in Annapolis, Maryland; Rebecca Santana in New Orleans; Emily Wagster Pettus in Jackson, Mississippi, and Pat Eaton-Robb in Columbia, Connecticut, contributed to this report.<\/p>\n