SALT LAKE CITY (ABC4) – As tax day approaches this year, you may be wondering how people nationwide and in Utah spent their child tax credit. Data from QuoteWizard by LendingTree provides some insight.
Nationwide child tax credits were increased in 2021 by the American Rescue Plan Act, which funded many programs designed for financial COVID-19 relief. Depending on the taxpayer, the act increased the credit went from granting 2,000$ of tax relief per child up to $3,600 in some cases.
Critics of tax breaks for families and parents might wonder if this program designed to support health development of children did what it was intended to. According to the data from QuoteWizard, nearly 80% of people used the tax credit to buy food, suggesting a net positive effect on American children. Nationwide averages also indicate that clothing was the runner up on money spent, with housing and utilities close behind.
These trends are closely mirrored in Utah as well. 74% of people used the tax credit for food, followed by clothing at 43% and housing at 44%, similar to national averages.
This data prompts further questions about federal COVID-19 relief programs like the tax credit and stimulus packages. Many critics suggest that an influx of cash to consumers by programs like the tax credit may be contributing to dramatic inflation in the US. Increased spending on food in Utah and other states because of the child tax credit could contribute to this, and maybe explain high local food prices.
This being said, it is hard to refute the evidence that the child credit is doing what it is intended to do in Utah and elsewhere in the nation: help parents provide their children with basic essentials like food, clothing, and shelter.
Whether or not future and current parents can expect these high tax credits to continue, however, is impossible to say