Harris wants to bring back the expanded child tax credit. That’s why it’s good. (Video)

Brittany Barnett remembers the financial security she felt for six months in 2021 when she received an extra $300 a month in the expanded child tax credit.

The single mom of three from Charlotte, North Carolina, bought clothes for her youngest daughter, then 5, and helped her son put down a down payment on a car so he could get to work and help get his little sister around.

“For me, the supplement meant an extra safety net every month. You knew it was coming,” said Barnett, who is starting work with her state’s Low-Income Energy Assistance Program.

The monthly payments expired in December 2021, but Vice President Kamala Harris wants to restore and expand the credit if she wins the White House.

Donald Trump ally J.D. Vance has proposed increasing the child tax credit, but the Trump campaign has not supported the effort. He does want to make permanent the tax changes Trump enacted in his first term, which increased the child tax credit from $1,000 to $2,000 per child.

Extended Credit has already shown what it can do to fight poverty and hunger in the short time it has been implemented. Bringing it back now could ease the economic pressure that Americans continue to report from higher prices, especially among the most financially vulnerable households.

“If they brought it back now, it would be helpful, especially now with inflation,” Barnett said. “Every day I try to understand what we can afford to eat and what is good for our health.”

Under the American Child Rescue Plan Act, the tax credit gave families $3,600 for each child in the family under age 6 and $3,000 for each child ages 6 to 17. This is more than the original maximum credit amount of $2,000 per child.

On top of that, the relief package made the credit fully refundable, eliminating the minimum income requirements that prevented the poorest families from qualifying for the full credit. Half of the loan was distributed to families in monthly payments from July 2021 to December 2021—payments that have helped Barnett and millions of families cope with the ongoing costs of raising children.

As a result of these changes, especially the loan repayment option, the child poverty rate reached a historic low of 5.2% in 2021 and food insecurity among low-income families fell by 25%.

Other surveys have found that payments allow parents to keep track of their bills, build savings and even start a business. Telephone interviews conducted by the Center for Law and Social Policy (CLASP) after the expansion revealed that parents may also be throwing their child’s birthday party for the first time or affording an instrument so their child can join their high school’s marching band.

“One theme that really stuck out to me is that these payments weren’t just for bills and food and groceries,” said Ashley Burnside, a senior policy analyst at CLASP. “But it also helped parents say yes to many of the experiences their children wanted and create those positive moments that can make parenthood and childhood so special.”

Read more: Child Tax Credit: Everything You Need to Know for Tax Year 2023

Crystal D., a single mother from Grand Blanc, Michigan, was able to pay for the private tutoring and mental health services her now 9-year-old son needs. She received about $250 a month thanks to the expansion of the child tax credit due to the pandemic.

Now that she’s not working as an occupational therapist in a nursing home, Crystal spends her time finding alternative ways to provide these services because she can’t afford the full cost herself.

“It was very difficult,” said Crystal, who did not want her last name published to maintain some privacy for her son. “Public educational institutions usually have a one-year waiting list, so I can’t get the services he needs right away.”

Overall, more than 36 million families with 61 million children received nearly $93 billion in advance child tax credits in 2021. By December 2021, the average payout was $444.

Since expiration, most of the loan has been repaid. The child poverty rate more than doubled in 2022, reaching 12.4%, “the largest increase ever recorded,” Burnside said. Last year, this figure continued to rise, reaching 13.7%.

Harris’ campaign wants to go further than just restoring an expanded child tax credit. A Democratic presidential candidate wants to give new parents $6,000 for their child’s first year of life.

This influx of money will come at a critical time when new parents have to spend so much money on hospital bills, car seats, strollers, baby formula and “just exorbitant amounts of money on diapers,” said Eileen Arreaza, executive director of Parents Together. National non-profit parent organization.

“New moms and dads have so much coming at them from all sides. Having a newborn can be very, very difficult,” she said. “And this is something that can ease that burden a little bit, and that’s what families deserve.”

Overall, an expanded child tax credit — in addition to expanding the Earned Income Tax Credit and the homebuyer credit that Harris also proposed — would greatly benefit low- and moderate-income households, according to the Tax Policy Center’s analysis.

The analysis found that this would reduce tax revenue by nearly $1.6 trillion between 2025 and 2034 compared to current law. But the long-term effects may be worth the cost.

A working paper released this summer modeled what would happen if the child tax credit expansion were made permanent. Conclusions? This will lead to higher future incomes and tax payments, improved health and longevity, and lower health care, crime and child welfare costs. The paper says the benefits to society outweigh the costs by nearly 10 to 1, largely because of the potential for full loan repayment.

“We got all this rich data from people saying, ‘I got to spend time with my family in a way I haven’t done before,'” says Lauren Reliford, director of policy at Children’s Defense. Fund.

“And when a parent can actually spend time with their child, (it’s) really vital for optimal outcomes as an adult,” she added.

“What is the best benefit for society?”

Jeanne Herron is a senior columnist at Yahoo Finance. Follow her on X @JeanneHerron.

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