Emily Shields
Emily Shields discusses her struggles paying bills during the coronavirus pandemic and how provisions in the American Rescue Plan that would provide her family with additional money to pay for basic living costs and other expenses while her 2-year-old son, Landyn, plays on her lap. (Photo by Julian Emerson)

Parents across Wisconsin and the US received their first monthly payments after the American Rescue Plan expanded the child tax credit.

When Emily Shields noticed an $1,100 deposit in her checking account Thursday courtesy of the expanded child tax credit, she breathed a sigh of relief. 

That feeling has been in short supply for Shields in recent months. The single mother of four children faces financial struggles as living costs outpace her income. She recently paid up on rent she had fallen behind on during the coronavirus pandemic, but two of her young children have serious medical conditions that require significant medical care and resulting medical costs.

Shields, who lives in Eau Claire, said she has also fallen behind on other bills. To make matters worse, two weeks ago, she said, she was in a vehicle accident in which the van she was driving was totaled, and she needs to buy a different one. She works at two jobs but missed the last four months of work at one of them because of a back injury. 

With so many financial challenges and more to come, Shields said she’s especially grateful to be a recipient of federal tax credit dollars. 

“Having this $1,100 a month is what’s going to get my head above water,” she said, noting she is deciding how to prioritize spending those dollars. 

Most eligible families in Wisconsin and the US received their first child tax credit payments Thursday, part of a temporary expansion of the child tax credit as part of the American Rescue Plan. The credit was expanded from $2,000 to $3,600 for each child under age 6 and from $2,000 to $3,000 for kids ages 6-17, or monthly payments of $250 or $300 per child. The credit can be received as a monthly disbursement instead of an annual lump sum payment. 

In Wisconsin, an estimated 1.2 million children—92%—will be impacted by the tax credit and 46,000 will be lifted out of poverty, according to the Center for Budget and Policy Priorities. Nationally, the tax credit is projected to help lift about 4.1 million children out of poverty, and it will positively impact tens of millions more.

Child tax credit advocates said the measure is much-needed by families looking to make up for financial losses suffered during the coronavirus pandemic. Many people faced monetary difficulties before the pandemic, they said, and their struggles were made worse during the past 15 months. 

Even as the economy bounces back, many people need financial assistance to get back on their feet, child tax credit advocates said. US Rep. Ron Kind (D-La Crosse) said 45,200 households, covering 90.5% of all children living in the Third Congressional District he represents, will benefit from the tax credit. 

“The Child Tax Credit monthly payments will help hardworking families across Wisconsin set their children up for success and invest in their futures,” Kind said in a statement.

Terry Lee, a father of three children who lives in Green Bay, is among them. At a press conference Wednesday organized by the Democratic Party of Wisconsin to discuss the child tax credit, he said the $750 monthly child tax credit payment his family will receive “will really completely change our kids’ lives.” 

In upcoming months, a medical issue with one of his children will lead to medical bills, Lee said, and his family faces other ongoing expenses as well. Paying bills during the pandemic was a struggle at times, he said. 

“Because of this tax credit, we’ll also be able to not have to worry about putting food on the table, or the school supplies that we’re going to have to pay for in the upcoming months,” he said.

Debate Over Extension

Child tax credit payments are scheduled to end Dec. 31, but Kind and other Democrats are advocating for extending them beyond 2021, with some calling for making them permanent. President Joe Biden has called for extending the monthly payments through 2025 as part of his proposed American Families Plan

Some Congressional Republican lawmakers have proposed their own plans for payments for children, but none are expected to back the Democrats’ child tax credit plan. No Republicans voted in favor of the American Rescue Plan, which included the temporary child tax credit expansion.

While he didn’t expressly say he opposes making the child tax credit payment permanent as Democrats propose, US Sen. Ron Johnson (R-Oshkosh) said in a statement he opposes using the existing tax code “for either economic or social engineering.” Instead, he said he prefers a flat tax structure without credits, which he likened to “special deals.”

However, others, such as Citizen Action of Wisconsin and Wisconsin Main Street Alliance, said the enhanced child tax credit has the potential to not only help state residents recover from the pandemic, but to lift children and their families out of poverty. 

“This will help more than 65 million American children and deliver critical financial support to families—especially working parents—who are struggling with expenses like child care and healthcare premiums,” a news release from Wisconsin Main Street Alliance states. “The Child Tax Credit isn’t only critical for families, it’s critical for our economy at large.”

Most of the nearly 39 million families who are eligible for the child tax credit have filed taxes or received stimulus checks and don’t need to take added steps to receive payments. But the families of an estimated 4 million to 8 million eligible children are at risk of missing the benefit because they aren’t required to file taxes or have not done so. Families can use the Internal Revenue Service child tax credit non-filer sign-up tool to access their benefits.  

Working families will receive the credit if they are a couple and earn up to $150,000 or are single-parent family and earn up to $112,500. Families can learn more about the expanded child tax credit by visiting ChildTaxCredit.gov.