What Are Parents Spending Their Child Tax Credit Money On?

young asian parents and son having fun outdoors in park.
imtmphoto / Getty Images/iStockphoto

More than $15 billion in child tax credit payments were sent to eligible families today, the U.S. Treasury Department and IRS announced, bringing the total to more than $61 billion in direct payments since July.

Today’s is the fourth monthly payment of the expanded CTC provided in the American Rescue Plan. Eligible families get a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 to 17.

See: New Study Shows the Advance Child Tax Credit Does Not Affect Employment Numbers
Find: Stimulus Qualification: Here’s How To Get the Child Tax Credit If You Had a Child in 2021

So where is all the money going? According to a Treasury Department press release, the Census Bureau’s Household Pulse Survey collected data on how middle-income American families spent their first payments. Here’s what it found:

  • 55% spent their CTC payments on food
  • 26% spent it on clothes
  • 23% spent it on school and after-school costs

A more recent national survey from researchers at the Social Policy Institute found that 42% of CTC recipients planned to use at least some of the credit to start or grow a college fund for their children. Nearly one-quarter (24%) planned to use the payments for child-care expenses.

Make Your Money Work Better for You

Another survey, conducted by researchers at the Columbia Center on Poverty and Social Policy, found that lower-income families tended to use the money for food. The initial payments were associated with a “25% decline in food insufficiency” among low-income families with children.

See: How To Use the Child Tax Credit Update Portal
Find: Stimulus Update: Haven’t Received a Child Tax Credit Payment? Check If You’re Eligible

“It’s clear this tax relief is meaningfully improving the lives of children in every corner of the country, which is why Congress must act to extend it so these monthly payments don’t end after December,” Deputy Treasury Secretary Adewale Adeyemo said in a press release.

Two more advance CTC payments are scheduled for this year — one on Nov. 15 and one on Dec. 15. The December payment will be the final one under the expanded CTC unless Congress acts to extend it, the Treasury Department said.

More From GOBankingRates

Make Your Money Work Better for You

Last updated: Oct. 15, 2021

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.