Most Americans Plan to Put Advanced Child Tax Credit into Savings
Thanks to an expansion of the child tax credit, many American families will soon be able to receive extra federal money. According to a new survey from personal finance app Stash, a majority of Americans plan to put that money into savings. Stash polled over 1,100 Americans, 700 of whom were eligible parents for the new child tax credit., reports CNBC.
The American Rescue Plan temporarily expanded the child tax credit for 2021. Eligible families will receive half of the total credit amount in advance monthly payments starting July 15. Families can receive the other half when they file their 2021 income tax return. According to the IRS, parents will receive monthly payments of up to $250 per qualifying child and up to $300 for children under the age of 6 from July 15 through December 2021. Stash added that the tax credit will reportedly benefit 88% of American families with children.
CNBC noted that 57.5% of those surveyed plan to save the child tax credit while 42.5% say they expect to spend it. According to those planning to save, 51% plan to put it into a standard savings account and CNBC pointed out that 40% say they’re planning to invest the funds through a personal brokerage, custodial or retirement account.
Among those looking to spend, most answered that they are putting that money towards their families and monthly expenses. Roughly 32% say they will use that money to help pay monthly bills, 20% will pay off debts and 33% will use the tax credits to pay for items for their children.
“Ultimately, the goal for these payments should be to help alleviate money stress and get your family back on track, or better positioned to hit your long-term money goals,” says Jeremy Quittner, editorial director and “resident money expert” at Stash, as reported by CNBC.
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