On Thursday, July 15, qualifying families can expect to start receiving the first monthly Child Tax Credit payment from the IRS, to the tune of up to $300 per child. All but the highest earning families qualify for the stimulus, which is really an advance on the Child Tax Credit that families claim when filing their taxes. By receiving the money in monthly installments through December of this year, rather than as a credit on their tax return, families will be able to put the money toward things they need sooner, and in turn boost the post-pandemic economy.
Parents who filed a 2019 or 2020 tax return and meet income requirements are automatically enrolled to receive advance payments on the Child Tax Credit. If you are not required to file a tax return, you could still qualify for the advance. Click here to access the non-filer signup tool on the IRS website, or here to see if you qualify.
Critics of the plan say that “free money” removes the incentive for parents to work and note that checks will be sent to drug addicts and other delinquents without any vetting processes. There is evidence to the contrary, though, in similar programs such as Alaska’s Permanent Fund Dividend (PFD), which has been giving Alaskans “free money” annually since 1982. Economists say that the PFD has had virtually no effect on employment rates, but credit an increased birth rate to reduced financial stress.
Another such program, the Eastern Band of Cherokee Indians Casino Dividend in North Carolina, pays every tribal member a few thousand dollars each year with no questions or strings attached. As a result, addiction and crime rates lowered dramatically, suggesting that poverty accelerates addiction rather than the other way around.
Only time will tell what the real effects of the Child Tax Credit advance payments will be. In the meantime, parents across the country are going to be keeping a close eye on their bank accounts and mailboxes in anticipation of a little help from Uncle Sam.