What families are doing with their child tax credit, how parents can make the most of the credit
FLORENCE, Ala. (WAFF) - The first child tax credit payments have been sent.
It’s a boost for millions of American families made possible through the second COVID-19 relief package, the American Rescue Plan.
The extra money that comes each month is coming just in time for the Hardeman family.
“We’re having another baby in September and so all of the money that is coming every month, we’re putting in saving for that period of time that my husband will be at home on FMLA,” said Lindsey
President Joe Biden’s administration pushed for the tax credits as a means to help parents get back on their feet after the pandemic.
However, some parents have decided to opt-out of the payments.
“I think it’s great for families that are hurting and struggling with the pandemic but we are not in that situation right now so we decided to opt-out,” said Jennifer Powell.
Parents are able to get an advance on half of their 2021 credit, with monthly payments of $250 or $300 per child starting in July through December 2021.
If families choose this option, the remaining child credit will be sent after filing 2021 taxes in 2022.
So how can parents make the most of the tax credit?
According to Forbes:
- Consider establishing or replenishing emergency savings, especially if they have been spent down
- Address debts.
- Consider using some or all of that income for childcare.
CPA Roger Williams said when it comes to these things, do what’s best for you and your family’s financial situation
“It’s really important that each person looks at their current financial situation and determine what’s best moving forward as far as what’s best with these additional funds where it’s best spent,” said Williams.
The Hardeman’s said the boost is exactly what they needed.
“It’s a pretty big thing for us, it’ll allow him to take off for a longer period of time with a little more comfort,” said Hardeman.
Copyright 2021 WAFF. All rights reserved.