Child Tax Credit Update – Fears that a $ 300 monthly payment will cause 1.5 MILLION parents to quit their jobs

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Fears are growing that monthly child tax payments of $ 300 could cause up to 1.5 million parents to quit their jobs.

While President Joe Biden plans to extend payments until 2025, many have argued that this could lead parents to leave the workforce.

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Currently, parents do not need to work to benefit from the monthly payments

Up to 1.5 million parents could leave the workforce due to extended payments, according to a recent study, as reported by CBS News.

They would represent 2.6 percent of all working parents.

The study was carried out by Bruce Meyer, economist and specialist in poverty and safety nets.

While the earlier version of the benefit required families to owe taxes on their income to qualify, parents currently do not need to work to qualify for the monthly payments.

“The proposed expansion would remove the strong incentives to work under the old CLA; it would essentially take away a tax credit that encouraged work and replace it with something that discouraged work, ”Meyer said.

Because of these concerns, many, including Senator Joe Manchin, have suggested that the payments should include a work requirement.

Read our live blog on the Child Tax Credit for the latest news and updates …

However, supporters of the payment extension argue that the previous benefit structure did not help children living in poverty and only reached families earning more than $ 50,000.

As CBS points out, not all economists agree with Meyer. In fact, over 400 economists signed a letter in support of expanding the child tax credit last month.

According to Meyer’s estimate, child poverty would fall by 22% even if 1.5 million parents stop working because of the payments. By comparison, he claims that there would be a 34% reduction in child poverty if the payments did not affect labor force participation.

Child tax credits are worth up to $ 3,600 per child under six in 2021, $ 3,000 per child between six and 17, and $ 500 for college students.

They are automatically issued as monthly advance payments of between $ 250 and $ 300 until December, unless you opt out.

The remaining money – up to $ 1,800 – is then distributed after the IRS processes your 2021 tax return in 2022.

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