The public health crisis precipitated by the COVID-19 pandemic resulted in a catastrophic economic crisis for low and medium-earning Americans who had their income abruptly stopped as businesses shut down across the country. It drastically changed the way people lived and worked and brought in a variety of challenges for families.
The federal Treasury Department provided various relief measures both in the form of direct stimulus checks, and support to businesses, state, city, and local governments.
During the critical juncture immediately after the pandemic struck at the beginning of 2020, these stimulus checks provided the only source of earning for millions of Americans and ensured that people could put food on the table, keep their homes, ensure the supply of utilities, and are not enveloped by a debt trap.
The monetary wings of the federal government, the Bureau of Fiscal Service, the Treasury Department, and the IRS rapidly sent out three stimulus checks within one year. Payments from the third stimulus check also called the Economic Impact Payments, continue to this day.
The federal administration took other emergency measures including employment assistance that started in March last year. Federal taxes were also waived on unemployment benefits to provide relief for those who lost their jobs immediately as the pandemic struck.
The Child Tax Credit Stimulus Check Continues To Be Only Federal Support
To help out the weakest and most affected members of any society, its children, the federal administration enhanced the Child Tax Credit from $2,000 a year to $3,600 max, half of which was paid out in monthly stimulus checks between July and December 2022. The expanded coverage led to better assistance for families with children.
The CTC stimulus checks significantly reduced poverty by supplementing the earnings of families who receive the tax credit and making the credit available to numerous new families.
The credit amount was considerably enhanced under the American Rescue Plan Act signed by President Joe Biden in March 2021. The amount went up from $2,000 to $3,600 max for families with children aged below six, while for children between six and seventeen, the total CTC stimulus check was $3,000.
For the first time, the credit was made refundable. Thus low income-house holds received the full benefits well in advance as the CTC stimulus checks are originally paid after filing of income tax returns. For the 2021 returns, the date was in the first quarter of 2022. It significantly expanded the scope and impact of the American Rescue Plan Act.
Families received a monthly stimulus check between $300 and $360 per child depending on their age. And for the first time, children aged even 17 came under the cover of the CTC payments, earlier the cut-off age was 16.
Eligible taxpayers received monthly payments starting almost a year in advance of half of their estimated CTC amount for 2021 in six equal installments. Families who cared for children were also able to receive financial assistance on a consistent monthly basis for six months starting July 2021.
Moreover, the ARPA extended the full CTC stimulus check permanently to Puerto Rico and the American territories. For the first time, low-income Puerto Ricans and residents of these territories received this vital financial support to support their children’s education and health.
End Of Child Tax Credit Stimulus Check Spelled A Return To Poverty For Many
The child tax credit stimulus check was a lifeline for families with children. The refusal by the Republicans and the betrayal by Democratic Senator Joe Manchin to back him meant that the equally divided Senate was not able to push through the bill to extend the enhanced child tax credit beyond 2021.
The extra income from the expanded child tax credit was a lifesaver and arrived at the right moment for millions of families. It helped put food on the table while it was never a replacement for the income from the jobs that were lost, it helped all families stay afloat during those harrowing days.
It paid for basics like gas, food, and utility bills. But that safety net disappeared after the Republicans refused to back the program as part of the Build Back Better plan.
It was a time when inflation was going out of control and the prices of everything skyrocketed. The low and medium-income earners and the unemployed felt abandoned by their country. Parents went to bed wondering how to pay for their bills and take care of their kids. Kids even felt the stress that their parents went through.
The payments from the child tax credit were closing the chasm between child poverty and hunger to a large extent in the US. And in the months since the stimulus checks stopped, it is evident that these families were betrayed when they needed this part of federal support the most. Most have again slipped back into financial trouble.
The End Of Federal Support Collide With Inflation And All Round Rising Costs
The impact of the end of the month’s payments was brutally swift, according to studies by analysts. Around 3.7M children were kept out of poverty with the aid of child tax credit payments. In January, these children fell into poverty as the deposits dried up.
And the loss of the monthly payments has coincided with all-around rising prices in food, gas, housing, and utilities. States have stepped in individually to help out families affected by the unprecedented rate of inflation, the highest in over 4 decades.
Utilizing funds for 2021 budget surpluses and federal funds received under ARPA, many states have enacted laws to help their residents through stimulus checks, tax rebates, gas and transit cards, and sales tax holidays for gas and essential items.
Maine and New Mexico are among the first states off the mark and residents will receive stimulus checks in June itself. Maine will be giving an $850 relief payment to an estimated 858,000 residents earning below $100,000 if individuals and $200,000 if filing as married couples. Heads of households can claim the stimulus check if their AGI is less than $150,000.
1.1 million residents of New Mexico will benefit from household relief payments with married couples eligible for a refundable income tax rebate worth $500 with a joint income of under $150,000. Individual filers with earnings of $75,000 will also get the relief payment. No applications are required and residents who have fielded their 2021 tax returns will automatically receive the payment.