In the first months after the federal government began issuing monthly payments of the expanded Child Tax Credit (CTC), West Virginia saw a significant decrease in food insufficiency. West Virginians largely spent their CTC payments on household essentials, with food being at the top of the list, followed by utilities, clothing, and paying down debt.
As the school year approached, the CTC payments also helped many parents and other caregivers invest in their children’s education. According to data from the Census Household Pulse Survey, nearly 40 percent of West Virginia families who mostly spent their CTC payments used the payments to cover education costs such as school books and supplies, tuition, after-school programs, and transportation to and from school in September, while 26 percent used the payments to cover child care costs.
Overall, 91 percent of low-income households in West Virginia are using their monthly Child Tax Credit payments for basic household expenses such as food, clothing, shelter, utilities, and education. This is consistent with evidence from Canada, where parents, particularly those with low incomes, spend their child allowances on household essentials and education expenses.
Many of these households are receiving the full Child Tax Credit for the first time thanks to the American Rescue Plan’s (ARP) credit expansion. The ARP not only temporarily increased the credit amount and allowed for the credit to be paid monthly rather than once a year at tax time, but also paused a provision that prevented millions of low-income children from receiving the full credit because their parents earned too little or lacked earnings in a given year.
Making these changes permanent is a key provision of the Build Back Better agenda, and should be a top priority for West Virginia’s congressional leaders. The expanded credit is already leading to an historic reduction in poverty in the state, and now we have data showing it is allowing for more investment in education and child care for West Virginia’s families.
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