The federal relief package — the third passed by Congress since the coronavirus was declared a pandemic 12 months ago — includes one-time cash payments to most adults, money for childcare centers and extended unemployment benefits.
But the biggest direct injection of cash targeting families is the increase in child tax credits: up to $3,600 for children up to 6 years old, up to $3,000 for those 7 to 17. The credits were previously $2,000.
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Such credits are not just heftier, but paid differently than in the past, giving a major boost to poor families that missed out on some or all of the benefits until now.
Tax credits are typically claimed by about 30% of Georgians filing returns, said Laura Wheeler, associate director of the Center for State and Local Finance at Georgia State University.
Such credits in the past were used to offset taxes owed. Now, a lower-income family that didn’t earn enough to qualify for the credit will be refunded — that is, receive cash — for any unused credit, said Wheeler. Households will get half of those refunds in monthly payments from July through December, and the other half next year.
That’s a significant change for families like the Shearns. The Alpharetta family has two children, ages 5 and 11, but couldn’t claim the full credit until now because their income was too low.
The parents, Ayesha and Les, are both working, but Ayesha’s hours have been cut. Meanwhile, normal bills mount: the mortgage on their home, the $400-a-month fee to the subdivision association, and utilities.
Plus there are expenses they didn’t face before the pandemic, like sensory materials for her suddenly home-schooled special needs son. And with everyone home, their grocery bill is twice as high.
“We are behind on a few things and we’ve had to use our credit cards. We just want to get caught up,” Ayesha said.
About 500,000 children in Georgia — or nearly one-fifth of all children in the state— live in families with incomes below the poverty line, which is about $26,000 for a family of four, according to federal guidelines. Roughly 217,000 children in Georgia live in “extreme poverty,” in families with income less than half the poverty line, according to the Childrens’ Defense Fund.
Like many of the relief bill’s provisions, the changes to tax credits are for this year only. Critics fear they will be made permanent. Supporters say that would be a good idea.
The revamped child tax credit isn’t the only new help arriving for families struggling to make ends meet.
Other aid in the American Rescue Act will come in the form of $1,400 one-time payments to most adults. Additional assistance includes changes that make household finances stretch further, like subsidies for healthcare premiums, help with rent or a boost in the amount of money that can be spent through SNAP, the program often called food stamps.
And some of the money will be spent supporting other institutions that in turn are needed by parents.
In the early days of the pandemic, most of the state’s childcare centers were closed. While about 90% are open now, attendance is still down 25%, said Reg Griffin, spokesman for the Georgia Department of Early Childhood Care and Learning.
The state will get more than $1.5 billion from the American Rescue Act, according to Griffin. About $600 million of that would be used to support families and childcare providers, while the rest would go to a fund to keep thousands of childcare centers open, he said.
That alone is crucial, because working parents need affordable childcare, said Mindy Binderman, executive director of the Georgia Early Education Alliance for Ready Students, an education and advocacy group.
“This is really historic,” she said. “We need to stabilize the childcare industry and help family stability too, so that parents can work and so that single parents do not have to leave the workforce.”
Moreover, anything that raises families from poverty is good for children, she said. “We know that kids who experience stress are hurt in their development, and poverty is a stress.”
The legislation also extends $300 in federal weekly unemployment benefits through September, representing additional financial support. Some 450,000 Georgians are still receiving unemployment benefits, and many of the jobless are parents.
Nura Moshtael is a single mother with a 12-year-old son who has Down Syndrome. She was taking courses toward a commercial pilot’s license and working two restaurant jobs when the pandemic hit.
She lost both jobs, but the first round of pandemic relief included a $600-a-week federal unemployment payment that kept her in her Buckhead apartment. When that program ended, the benefits weren’t enough to pay all her expenses, so she moved to Macon to live with her widowed mother.
“After August, I was bringing home $1,400 a month — who can live on that?” she said. “I’m lucky I had somewhere else to land.”
She’s been interviewing for jobs, hoping to move to management — and hopefully back to Atlanta.
Among the ways the American Rescue Act will offer help to Georgia families:
-- A one-time check of $1,400 to most adults
-- Extension of the $300-a-week padding of unemployment benefits for those who lost jobs during the pandemic
-- A 15% increase in benefits for SNAP, the state-administered program formerly known as food stamps, plus increases in vouchers for pandemic food programs
-- Subsidies to childcare centers through the state’s Department of Early Childhood Care and Learning
-- Rental and mortgage assistance
-- Loosening of requirements, additional subsidies and caps on premiums for those getting healthcare through the Affordable Care Act, commonly called Obamacare
-- A substantial increase in the tax credit and changes in the rules that will allow even low-income Georgians to take advantage of it. Parents receive a credit up to $3,600 for each child age 6 and under. Parents get a credit of $3,000 for older children up to age 17. The credits are “refundable,” which means that parents who cannot use them to offset taxes will get the credits in cash — half in monthly payments starting in July, half next year.
Ayesha Shearn of Alpharetta and her husband, Les, have been getting by by going into debt, so they are anxious to get federal help. Here she and her husband along with their children pose with a family friend.