CHICAGO — For Chicago resident Lana Waters, the recent arrival of her first $550 child tax credit check will ease the pinch to her pocketbook when shopping for back-to-school supplies and uniforms this month for her two young daughters.
“It’s actually already coming in handy, as it’s right around the start of the new school year, and I was unemployed for a while during the pandemic,” said Waters, 32.
Waters, of the Woodlawn neighborhood, lost her longtime job as a bartender during COVID-19 shutdowns, and is now working as a contact tracer and booking vaccine appointments at the nonprofit Ada S. McKinley Community Services.
She said the new monthly child tax credit payment, directly deposited in her bank account last week, “is a good step in making me feel financially stable.”
“I think it’s a great step for every household, because we won’t be living paycheck-to-paycheck, worrying about making ends meet, and always trying to figure out how to pay the rent and keep the lights on,” Waters said.
The child tax credit of $250 or $300 per child in the American Rescue Plan represents “the largest child tax credit ever” to most working families, according to the White House.
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The first of six monthly payments — the remaining tax credit will arrive after families file their tax returns — began arriving automatically this month for those who filed tax returns for 2019 or 2020, or signed up to receive a stimulus check from the Internal Revenue Service.
While President Joe Biden is calling for Congress to extend the expansive tax relief effort beyond this year, some critics warn that because the funds automatically reach only those who file taxes, the poorest of the poor could inadvertently be excluded.
In Illinois, an estimated 11.5% of residents were living in poverty, according to a 2019 U.S. Census Bureau report. Nationwide, around 8% of households earned between $15,000 to $24,999 in 2019, according to the report.
“The child tax credit is a great program, but it doesn’t actually reach many of the most vulnerable people for the same reason the stimulus checks didn’t — because it’s administered through the IRS,” said Tyler Hall, a spokesperson for the nonprofit Give Directly.
With married households earning less than around $25,000 exempt from filing income taxes — and roughly one-third of Americans in poverty not enrolled in a single federal safety net program — accessing the child tax credit payments can be unduly prohibitive, especially for those without internet access, a bank account or a permanent mailing address, Hall said.
Proponents say the program, if made permanent, has the potential to reduce child poverty across the U.S. by half. Hall said the first step should be ensuring benefits are being delivered to those most in need.
“There are a lot of ways to target people in poverty which are unique to the spaces where they live,” Hall said.
Families who have at least one qualifying child and earned less than $24,800 as a married couple, $18,650 as a head of household or $12,400 as a single filer can use the IRS non-filer sign-up tool to get the child tax credit and receive missing stimulus payments, according to the White House.
U.S. Rep. Bobby Rush, who supports making the program permanent, said Thursday he is confident the city’s social service providers and neighborhood “grapevines” are getting the word out to Chicago families who are exempt from filing taxes.
Recalling his own childhood, Rush said growing up in poverty meant that some days, the only food in the family’s cupboard was bread and syrup.
“You’re going to see young mothers who are now going to be able to buy their children a new pair of shoes, and have additional income to make sure there is a wholesome meal on the table,” Rush said.
The expanded child tax credit will help around 88% of children in Rush’s 1st Congressional District — an estimated 146,200 children — with an average benefit of $3,100 heading to 43,000 households, Rush said.
The program is anticipated to lift 15,300 children in the district out of poverty, Rush said, with families with children in poverty on average slated to receive an annual tax credit of $5,000, he said.
“The coronavirus pandemic is certainly earth-shattering, and right now, it’s all-consuming, but child poverty is just as lethal, and more lethal in some ways because it’s longstanding,” Rush said.
In Rockford, about 90 miles northwest of Chicago, Margaret McGaw-Sullivan, a mother of four special-needs children, said she and her husband were grateful when a $800 child tax credit check arrived in their bank account last week.
While McGaw-Sullivan said she and her husband are both employed and own a home, their insurance does not cover the entire cost of special services for their children, ages 9 months to 18, making the monthly tax credit checks a welcome addition to the family’s budget.
“I think families are all kind of struggling to get by these days, and no one is going to get rich from these tax credits, which we’re going to spend, so it will go right back into the economy,” said McGaw-Sullivan, who works in food service and as a teacher’s aide at her children’s school district.
“It’s important to be grateful, but now we need to push for it to be permanent in the future,” she said.
See the new Illinois laws that took effect July 1