What The Child Tax Credit Could Mean For Maine Families
Starting this week, some 39 million families across the US will be receiving a little bit more money each month to help cover the cost of providing for their children. In Maine, some 229,000 children are set to benefit from a temporary boost to the child tax credit program, which was approved as part of the American Rescue Plan. All Things Considered Host Jennifer Mitchell talked to Garrett Martin, executive director of the Maine Center for Economic Policy, more about the credit and what it might mean for families.
Note: This conversation has been lightly edited for clarity.
Jennifer Mitchell: So first off the the basics here. How does the program work briefly, and what can most Maine families expect from it?
Garrett Martin: The way the program works is that families with children now under the age of 17, are eligible for up to $3,000 per child between the ages of six and 17 and $3,600, under the age of six. And the way that that credit is delivered is, this is something that's new in the way it works, is that that will be provided in the form of monthly payments starting this month. And so for instance, a family that's receiving the $3,600 credit, would be getting $300 each month for that child, and then at the end of the year, the remaining balance will be deposited in their account from there.
So this program is not exactly new. It existed prior to the pandemic, but it's changed due to the pandemic. So what has changed? And why are we doing this now, what's so important about having the change now?
The reality is, the expanded program that we're seeing now, is a program that has been proposed in the past. So for instance, there was recognition before, that there are plenty of families out there with small children who have struggled, and that we need to make sure that they're able to access these programs. So one of the changes that was made, for instance, was not only was the amount of the credit increased over what it was previously, so this program did exist before. But more importantly, I think there were a lot of families, because the the amount of the credit that you received was tied to your income. If you didn't ironically make enough income, then you didn't get the full benefit. And so those families are being left behind. This program is expected to reduce child poverty in Maine by about 45%, which is remarkable. We've never seen that kind of impact of a public policy before.
So with that, I want to play a clip for you of a young woman we spoke to earlier, Allina, who lives in Warren. She's a single mother of three, one of whom has a disability. And her children's father passed away in 2018. She says with the pandemic SNAP benefits - those extended benefits that came about due to the pandemic - that those are set to expire. So she's expecting that actually a good chunk of her tax credit, she's going to spend filling a food gap.
"As a mother to three children, I can say food is, food is a huge expense. Our benefit was like $130, which for a family of four, you know, lasted us about one week, um, the stress of and worry of money is really all consuming, you know, not knowing if you're going to be all right," Allina said.
Allina's story is unfortunately, probably more common than it should be. The reality is, there are estimates that sort of suggests that it costs between $11,000 and $12,000 a year to raise a kid in Maine and New England. So when you talk about, you know, adding $3,000 into the mix for a family, there is no question that that amount of money makes a tremendous difference. And, you know, the other thing I would just add to that, Jennifer is that not only is that beneficial to those families directly, but it's also beneficial to our economy more broadly. Because what we know is that most of those families are actually spending those dollars in their community at grocery stores and other stores that hire people in their community that has a ripple effect. Our challenge at this point is, first of all, to to appreciate that this change has happened and to make sure that the families who are eligible and again, 90% of Maine families should see some money land in their accounts in the next month or so, but also to make sure that these changes get put in place over a longer time horizon than just this current year. The reality is that even before we got into the pandemic, families were struggling to make ends meet, and this is one tool that definitely makes a huge difference.
The IRS says those child tax credit funds should arrive automatically each month for most families, however, families unsure if they're in the system are eligible for the credit can use a new portal to see if they qualify and how to claim that benefit.