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What people are saying about the child credit payments

Happy family outside
Lucky Business/Shutterstock

In addition to the splash the child tax credit payments have made on TikTok, they’re all over Twitter, too.

"The first child tax credit payments went out to 65 million kids yesterday," former U.S. Labor Secretary Robert Reich tweeted on July 16. “It could cut the overall poverty rate by 40 percent. This is a huge deal and it’s not being talked about nearly enough."

"The extra child tax credit is awesome," added Gravity Payments CEO Dan Price in a tweet of his own. "I don’t have any kids. But there’s this weird thing where I want the next generation to have it better than we did. Not sure when that became scandalous."

It hasn’t all been positive. Many people on Twitter have pointed out that the monthly payments are really just an advance on the credit they normally receive come tax season.

"It's okay to say you had no idea you were benefiting before, but the child tax credit isn’t new,” tweeted user Click41607465. “The amount isn't much different, just the payment method."

That’s not untrue. The original child credit was packaged as a straight, $2,000 tax credit. The expanded version, which maxes out at a possible $3,600 per child, goes out in halves — half as six monthly direct payments, the other half as a traditional tax credit.

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Extending the beefed-up child tax credit

2020-2025 written on highway road in the middle of empty asphalt road  and beautiful blue sky. Concept for vision 2021-2025.
atk work / Shutterstock

An active line of discussion around the pumped-up child tax credit is whether it will be made permanent. As laid out in the COVID rescue bill President Biden signed in March, the child credit will revert back to its original form next year.

Top Democrats want to make the expansion permanent, including House Speaker Nancy Pelosi, Treasury Secretary Janet Yellen — and the president himself.

“This is a right thing to do, and it's a smart thing to do," Biden said last week.

But permanence is far from guaranteed. Democrats recently agreed on a $3.5 trillion budget deal that will include some sort of extension of the expanded child tax credit — though it's not clear for how long. Originally, Biden wanted to see the credit last until 2025.

If the new spending deal hits any significant snags, a separate bill focused on making the expanded child tax credit permanent could be spun off from it. But a stand-alone bill might need Republican support in the U.S. Senate, and no Republican voted in favor of the COVID stimulus bill that gave us the one-year expansion.

What would a permanent expansion look like? No one knows

San Francisco, CA - August 23, 2019: Speaker of the House, Nancy Pelosi, speaking at the Democratic National Convention Summer Meeting in San Francisco, California.
Sheila Fitzgerald / Shutterstock

There’s no telling at this stage how a permanently expanded child tax credit would function.

Based on the positive reaction the first direct payments have received, it's safe to assume vote-hungry lawmakers would see some value in the way the credit is currently constructed, with some monthly payments going to families.

One theory sees the program being administered by an existing government agency, like the Social Security Administration.

“We could have a streamlined spending program that we could commit to in the federal budget, and then families wouldn’t have to do this really complicated dance of figuring out how this affects their overall tax credit,” University of Maryland economist Melissa Kearney told CNBC.

Even leading proponents of a permanent child tax credit expansion, like Speaker Pelosi, admit more work needs to be done to build support for the initiative. In order to lengthen the life of the expanded credit, "we need to show that it really is working," Pelosi said during a news conference last week.

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Get the most from the current child tax credit

Mid-adult father is holding his newborn baby boy in his arm and then reading though the book with his son under the other arm. They all all sitting on the sofa in the living room.
DGLimages / Shutterstock

A fresh $250 — or more — in the bank can be a pretty sweet thing to wake up to. But to get the most from your child tax credit payments, try combining them with other, proven ways of saving money.

  • If you haven’t refinanced your mortgage in the past year, your family could be missing out on life-altering savings. With interest rates at their current levels, mortgage technology and data provider Black Knight recently said 13.9 million homeowners could save an average $293 a month with a refi.

  • If a refi isn’t for you, your household might reduce the cost of homeownership by finding cheaper home insurance. A little comparison shopping may be all you need to save hundreds of dollars on your coverage. The same strategy can help you save big on car insurance, too.

  • If you’re carrying a lot of high-interest debt, like credit card balances, reducing your monthly interest costs is a way to open up room in your budget. Paying off your balances with a single low-interest debt consolidation loan can help wipe out your debt faster and more cheaply.

  • Never assume that you don't have the means to earn money in the stock market. A popular app helps you invest in a diversified portfolio using just "spare change" left over from everyday purchases.


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Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.