Child tax credit survey shows 79% of people spend money on food

Koh Sze Kiat/Getty Images

In 2021, the American Rescue Plan Act (ARP) dramatically expanded the Child Tax Credit (CTC) for one year, making it the largest U.S. child tax credit ever and providing most working families $3,000 per child under 18 and $3,600 per child six and under.

See: 5 Best Foods to Buy in Bulk at Costco This Spring
Find: 10 Dollar Store Items That Aren’t Even Worth The Money

ARP also made the credit fully refundable and provided tax credit options for families to take half the credit in six monthly installments. Between July and December 2021, 39 million households with 65 million children – 88% of children in the United States – automatically received payments between $250 and $300.

Bonus offer: Find a chequing account that fits your lifestyle. $100 bonus offer for new current account customers.

Using the Household Pulse Survey, a collaborative survey conducted with more than a dozen partners from leading federal agencies to study how the coronavirus pandemic has affected households across the United States of From a social and economic perspective, Quote Wizard analysts looked at how families spent their payments and how child tax credit spending patterns vary from state to state.

Overall results of spending on child tax credits

Unsurprisingly, most Americans surveyed spent their expanded child tax credit on food, clothing and housing. Seventy-nine percent of people used part of their credit to buy food, followed by 46% for clothing and 40% each for housing and utilities.

CTC recipients also spent money on vehicle and debt payments (26%), education (21%), childcare (16%), recreational goods (8%) , transportation (7%) and after-school programs (5%). Four percent of respondents said they invested some of their credit in savings and 2% used some of the credit to make a charitable donation.

Child Tax Credit Spending by State

Across all spending categories, the survey found that spending on child tax credits differs from state to state. For example, in the largest spending category, 96% of Alaskans spent their money on food, compared to 58% of Rhode Islanders.

Bonus offer: Bank of America $100 bonus offer for new online checking accounts. See the page for more details.

But 61% of Rhode Islanders spent money on housing, while only 23% of Marylanders did. Sixty-two percent of people in North Carolina and Oklahoma spent money on clothes, while only 31% did so in Wyoming.

POLL: Where have you cut the most because of inflation?
Find out: 38% of recipients say child tax credit lowers their refund – Will this be the case for you?

How Americans Spent the Child Tax Credit

Overall, most national respondents said they use their CTC money to pay off their debts (25%). 18% mostly spent it and 13% mostly saved it.

At the state level, Arizona had the most people contributing money to pay off existing debt (33%), Maine and Vermont had the most people saving money ( 21%) and Alaska had the highest number of most time spenders. tax credit (24%).

While monthly Child Tax Credit payments ended in December 2021, the other half of the money can be collected by filing 2021 taxes.

More from GOBankingRates

About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to make a career change in 2016 and focus full-time on all aspects of writing. He recently completed a technical degree in communications and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience writing for the retail industry.

Comments are closed.