The Child Tax Credit, a first-of-its-kind cash benefit program that gave monthly cash to parents of children between 0 and 18 from July to December, was a major lifeline during the economic disruption of COVID-19 – an economic disruption that is, by the way , still going on, even if the cash benefit has disappeared (at least for now.)
The money, a few hundred dollars per child per month, was used for rent, clothing and utilities, and to pay off debt. This tax credit is well utilized, essential financial protection for millions of families. It has significantly reduced child poverty and child hunger. But it’s gone now. But which states across the country benefited most from the cash payments? Which states are going to lose the most from its sudden disappearance? Well, most of them, it seems, because even the state that is least dependent has told more than half of its parents that they need the cash.
Early data from the program showed that low-income families used the extra money to pay for basic necessities and daily needs. Even middle- or high-income parents used the tax credit for everyday things like food, rent, and clothing. Now, a new study of MagnifyMoney shows that some states needed the child tax credit “more urgently than others”. With this, the expiration of the credit program has had a significant negative impact on some states more than others.
To find out which states benefited most from the child tax credit, researchers analyzed the US Census Bureau Household Pulse Survey data from December 1 to December 13, 2021. “The survey asked respondents whether they or anyone in their household had received a child tax credit payment in the past four weeks.” MagnifyMoney explain.
The survey “asks whether respondents mostly saved it, mostly spent it, or mostly used it to pay off debt. Finally, it asked about specific spending categories, including food, clothing and charitable donations. ”
The map shows the states that need help the most than those with the darkest colors – Mississippi, for example, had 89.9 percent of families who said they urgently needed the tax credit, followed by Indiana and Pennsylvania. States that needed the tax credit the least are indicated by lighter colors – New Hampshire, Wisconsin, and, apparently, West Virginia, the data reads. (For what it’s worth, other data showed that 346,000 families relied on the child tax credit and found it “crucial” in the coal state represented by Senator Joe Manchin.)
MagnifyMoney / US Census Bureau Data
And yet, needing the “least” help did not mean that only a few parents needed the cash. In West Virginia, though, 59.8 percent of parents still said they needed the cash urgently – meaning it’s not as useful as a marker to need it or to rely on it “the least” . Instead, it might be best to consider this: more than half of parents in every single state – sometimes up to 90 percent of parents in states across the country – really needed that monthly cash, and probably still have. And yet it disappeared regardless. (Go here for full access to the interactive map.)
However, one thing is very clear: the child tax credits were an essential program for families across the country and with it expiring, many parents and children are now going without – while we are still in a pandemic.
“Restarting those prepayments in 2022 will continue that help, which is still important for many families who are still unable to work due to pandemic-related issues,” said Ken Tumin, founder of DepositAccounts.
Unfortunately, the chances of the Child Tax Credit coming back soon seem very slim.
