Brittani Barnett remembers the financial security she felt for six months in 2021 when she received an extra $300 per month from the expanded child tax credit.
The single mom of three from Charlotte, N.C., bought clothes for her youngest daughter, then 5, and helped her son with a down payment on a car so he could get to work and help shuttle around his baby sister.
"For me, the supplement meant an extra cushion every month. You knew it was coming," said Barnett, who is starting a job with the Low Income Energy Assistance Program in her state.
The monthly payments expired in December 2021, but Vice President Kamala Harris wants to reinstate and enhance the credit if she wins the White House.
Donald Trump's running mate, JD Vance, has floated increasing the child tax credit amount, but the Trump campaign has not endorsed that effort. It does want to make the tax changes Trump ushered in his first term permanent, which expanded the child tax credit amount to $2,000 per child from $1,000.
The expanded credit already has shown what it can do to fight poverty and hunger in the short time it was implemented. Bringing it back now could alleviate the economic pressures Americans continue to report because of higher prices, especially among the most financially vulnerable families.
"If they were to bring it back now, it would be helpful, especially now with inflation," Barnett said. "I struggle every day trying to figure out what we can afford to eat and what is beneficial for our health."
Under the American Rescue Plan Act, the child tax credit gave families $3,600 for every child in the household under 6 and $3,000 for every child between 6 and 17. That was up from the credit's original maximum value of $2,000 per child.
On top of that, the relief package made the credit fully refundable, getting rid of minimum income requirements that kept the poorest families from qualifying for the full credit. Half the credit was distributed to families in monthly installments from July 2021 to December 2021 — the payments that helped Barnett and millions of families keep up with the ongoing costs of raising kids.
As a result of these changes — especially the credit's refundability — the child poverty rate hit a historic low of 5.2% in 2021, while food insufficiency among low-income families dropped by 25%.
Other surveys found the payments allowed parents to stay current on their bills, build savings, and even start businesses. Phone interviews that The Center for Law and Social Policy (CLASP) conducted after the expansion found that parents also could throw a birthday party for their child for the first time or afford an instrument so their child could join their high school's marching band.
"One theme that really stuck out to me is just not only were these payments going towards bills, food and groceries," said Ashley Burnside, a senior policy analyst at CLASP. "But it was also helping parents to be able to say yes to a lot of these experiences that their children wanted and to create these positive moments that can make parenthood and childhood so special."
Read more: Child tax credit: Everything you need to know for the 2023 tax year
Crystal D., a single mother in Grand Blanc, Mich., was able to pay for the private tutoring and mental health services that her now 9-year-old son needs. She received about $250 a month with the pandemic child tax credit expansion.
Now, when she's not at her workplace in a nursing home as an occupational therapist, Crystal spends her time looking for alternate ways to provide those services because she can't afford the full cost on her own.
"It's been very difficult," said Crystal, who didn't want her last name to be published to preserve some privacy for her son. "Through public educational institutions, there's usually a yearlong waitlist, so I'm not able to get the services he needs immediately."
Overall, more than 36 million families with 61 million children received almost $93 billion in advance child tax credit payments in 2021. The average payment was $444 by December 2021.
Since the expiration, much of the good from the credit has been unwound. The child poverty rate more than doubled in 2022, hitting 12.4%, "the biggest increase ever recorded," Burnside said. The rate continued to climb last year, reaching 13.7%.
The Harris campaign wants to go further than just reinstating the expanded child tax credit. The Democratic presidential nominee wants to provide new parents $6,000 for the first year of their baby's life.
That influx of cash would come at a critical time when new parents have to spend so much money on hospital bills, car seats, strollers, formula, and "just exorbitant amounts for diapers," said Ailen Arreaza, executive director of ParentsTogether Action, a national nonprofit parents organization.
"For new moms and dads, there's so much coming at them from every direction. Having a newborn can be really, really hard," she said. "And this is something that can lighten that load just a little bit and it's what families deserve."
Overall, the expanded child tax credit — in addition to expanding the earned income tax credit and providing a homebuyer credit that Harris also proposed — would largely benefit low- and middle-income households, according to a Tax Policy Center analysis.
It would reduce tax revenue by nearly $1.6 trillion between 2025 and 2034 versus current law, the analysis found. But the long-term effects may be worth the cost.
A working paper released this summer modeled what would happen if the child tax credit expansion was made permanent. The findings? It would lead to higher future earnings and tax payments, better health and longevity, and a drop in healthcare, crime, and child protection costs. The paper said the benefits to society outweigh the costs nearly 10 to 1 — largely from making the credit fully refundable.
"We got all of this rich data from folks that were just like 'I got to spend time with my family in ways that I didn't before,'" because of the credit, said Lauren Reliford, the policy director at the Children's Defense Fund.
"And when a parent actually gets to spend time with their child, [that] is actually really vital for optimal outcomes as you become an adult," she added.
"As a society, what is a better benefit?"
Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on X @JannaHerron.
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