The [child tax credit payments] will be especially felt by families who are near the poverty line, said [Jim} Sullivan of Notre Dame. For instance, a family with two kids, including one under 6, would get a total credit of $6,600 — and that would translate to $550 payments each month, with the rest as a credit on their 2021 tax return. Overall, that’s about a 25% boost in monthly income for a family of four that is living at the poverty line of $26,500.
Those families tend to spend the money immediately, since they have a long list of needs — from putting food on the table to fixing a fridge or paying rent to a landlord, he said.
“It will go into spending as opposed to savings, in all likelihood,” he said.