After two months without receiving child tax credit payments, families are facing financial difficulties.

Since December, families with eligible children have not been receiving advance child tax credit payments for two months.

Many of those families are already struggling again to make ends meet.

According to a survey of over 800 members conducted by ParentsTogether Action in early February, nearly 60% of parents reported that they can no longer afford enough food since the checks stopped, while an additional 22% said they can no longer meet their families' basic needs.

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Allison Johnson, a campaign director with ParentsTogether Action, stated that the past two months have been a perfect storm of factors that have made life even more challenging.

Families are already struggling with the pandemic's impact on work and school, and now they face higher prices for everyday items due to the highest inflation in 40 years. This additional pressure on their budgets is compounded by the fact that they are seeing less money coming in each month.

Johnson stated that due to the combination of various factors, families are finding it extremely difficult to make ends meet, with about 80% of surveyed families having an annual income of less than $100,000.

Benefits of monthly CTC

The American Rescue Plan, signed into law in March 2021, enhanced the child tax credit by increasing it from $2,000 to $3,000 and providing a $600 bonus for children under six years old. Additionally, the plan added six advance monthly payments that ran from July to December and expanded eligibility for the benefit.

The benefit from the U.S. Census Bureau's Household Pulse survey showed a decrease in food insecurity and child poverty among families who received checks in the earliest months.

A survey from SaverLife in December revealed that 74% of people who received the credit used it for everyday expenses. Additionally, families who received the child tax credit spent more on utilities each month, indicating that the benefit helped them catch up on late payments, stay current on their bills, or even prepare for the future.

Radha Seshagiri, director of public policy and systems change for SaverLife, stated that the direct impact of child tax credit payments has been observed on low-income families.

According to SaverLife, over 80% of families utilized the extra money from child tax credit payments to improve their financial stability by saving or reducing their debt.

According to a survey by ParentsTogether Action, 77% of respondents reported that the payments reduced their financial anxiety.

Without the credit continuing, those results are being swiftly reversed.

Johnson stated that families were terrified of the possibility and its implications on their future. Now, we are witnessing this unfold in real-time in a tragic manner.

What’s next

The enhanced child tax credit is unlikely to be renewed anytime soon as the legislation supporting it has stalled.

To receive the second half of their advanced payments in 2021, families must file a tax return, as advised by Johnson. The IRS suggests filing tax returns online and selecting direct deposit of refunds to avoid any delays during this tax season.

Those who typically do not file taxes because they earn too little should submit their information to the IRS this year, as they may be eligible for the full child tax credit refund. This could result in significant savings for some individuals.

Johnson stated that it would significantly help numerous families currently facing difficulties.

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Radha Seshagiri is the director of public policy and systems change at SaverLife.