Killeen residents react to Child Tax Credit as first payments hit bank accounts
This article originally appeared on Killeen Daily Herald
By Erin Eskew
The first payments of the IRS Child Tax Credit hit the bank accounts of many Americans Thursday — others are still waiting to receive the payments.
Killeen resident Bri Nado said in a Facebook post last week that she does not feel comfortable with the Child Tax Credit.
“My money went straight to savings,” Nado said. “That way, if they try anything ‘funny’ come tax season, it’s ready to give back.”
Families have been given an option to take monthly payments of $250 to $300 per child — depending on the child’s age — or wait and receive the entire Child Tax Credit with their tax return at the end of the year, according to a letter sent out by the IRS.
The IRS reports about 1 million families have opted out of receiving monthly payments, compared to 35.2 million families opting to receive the payments in monthly installments. These numbers could change, as families are able to opt out of monthly payments at any time during 2021, through the IRS portal.
Aria Thaker, associate marketing manager at Doxo, said the economic crisis of 2020 has seriously impacted American households’ ability to pay bills.
“Two-in-five households had to delay paying at lest one bill during the COVID-19 pandemic, a recent doxoINSIGHTS survey shows,” Thaker said. “For qualifying families, receiving monthly payments of the IRS child tax credit could mean greater liquidity for paying bills on time and avoiding the additional financial burden of late fees.”
According to the Doxo website, for a child under 6, the annual amount paid in Child Tax Credits is equivalent to three months of the average mortgage or rent, 9 months of a $411 auto loan payment, almost a year of utilities of $316, a cable bill of $115 could be covered for 31 months, health insurance payments of $113 could be covered for 32 months, or 35 months of payments of a mobile phone bill of $102.
But waiting to receive the lump sum could make it easier to set aside in savings or investments, Thaker said.
“Some households that opt out of monthly payments may also do so because they expect their income levels to change, and they would rather not return money to the IRS next year,” Thaker said.
Local childcare centers have not yet noticed any change in people seeking or paying for childcare services with the influx of funds.
Lydia Rentas, the manager at Wonderland Daycare Center, said her daycare at 601 W. Elm Road has remained full all summer but most of her customers have been using her childcare services for a long time.
“I’m a small center, so you cannot really notice any difference,” Rentas said. “I’m licensed for 39—bigger centers may notice a bigger difference.”
Michelle Solis is the director of the Children’s Ark childcare center at 4104 E. Stan Schlueter Loop in Killeen, and she said she hasn’t seen any impact on her end from the Child Tax Credits which started hitting bank accounts Thursday.
“We have people on the waitlist, the problem is everyone is struggling with is finding staff to work—everyone wants to be on unemployment,” Solis said. “We don’t have enough staff to provide care.”
In the 21 years Michelle Solis has been providing childcare services, she said she has never seen anything impact the childcare business as the provisional unemployment benefits put in place to counteract the impact of COVID-19.
Solis said she has been turning away families over and above her normal waiting list, but she said the reason they’ve been giving lately is that their normal daycare centers have been closing suddenly.
“I did not ask all of them, but a great percentage of the ones I’ve talked to it’s because their childcare center has closed abruptly, and they’ve been trying to find space for childcare for their child and nobody has space,” Solis said.
Solis said she is heartbroken to see how unemployment benefits supposed to help get people through COVID-19 has had such a negative impact on our industry.
“We’ve been blessed, we have the staff that we need, I cannot accommodate new families or new kids, or any influx of people,” Solis said. “If you balance the fact that they’re giving all these benefits—that should have stopped by now, and what they get hourly, they’d rather sit at home and do nothing than work — who can blame them?”
Childcare is not the only industry that is suffering from a need from more employees.
“You see hiring signs everywhere—nobody wants to work,” Solis said. “Businesses cannot make it without staff. We can’t run a facility without staff, you can’t run a school without staff, you can’t run a restaurant without staff.”
Solis said she hasn’t seen anyone using their Child Tax Credit to pay ahead for childcare services, she assumes people are using the money for other bills, or savings.
John Crutchfield, president of the Greater Killeen Chamber of Commerce anticipates many local families will qualify for the Child Tax Credit but warns of the long-term impact of the immediate financial relief.
“I can’t quantify the impact—more dollars in circulation will provide a short-term stimulus to the economy and to the families who receive it,” Crutchfield said. “Unfortunately, this program, and others like it, that add to the deficit tend to increase inflation which could erode those short-term benefits over the long term.”