Where Advance Child Tax Credit Payments Were Most Needed

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In March 2021, Congress passed the American Rescue Plan, which — starting in July 2021 — provided families payments of up to $300 a month for each child younger than 6 and up to $250 a month for each child ages 6 to 17. The expanded program expired at the end of December 2021, leaving some families with tighter monthly budgets and dwindling savings account balances.

The latest MagnifyMoney study found that some states needed the advance tax credit more urgently than others. MagnifyMoney researchers found this by determining the percentage of families who received the child tax credit money and spent it on day-to-day needs such as groceries and clothes or debt payments.

Key findings:

  • Mississippi residents most urgently needed the additional child tax credit money. A MagnifyMoney analysis of U.S. Census Bureau data showed 89.9% of Mississippi families who received child tax credit money in the past four weeks mostly spent it on day-to-day needs like groceries and clothes or debt payments.
  • Mississippi also had the highest percentage of families who received a child tax credit in the past four weeks, at 26.8%.
  • The advance child tax credit was significant for families with lower incomes. Nearly 90% of respondents with a household income below $25,000 reported primarily using the child tax credit money on day-to-day needs or debt payments.

These advance payments helped many families, especially those with one or both parents who were unemployed and had to pay for food, utilities and other essentials, according to DepositAccounts founder Ken Tumin.

“The restart of those advance payments in 2022 would continue that help, which is still important for many families who are still unable to work due to pandemic-related issues,” Tumin says. As of now, though, political opposition has stopped a possible continuation.