Miamisburg, Ohio (WKEF) -- Starting Thursday, families will receive money for each of their children.
The Child Tax Credit payment passed as part of the American Rescue Plan.
Experts say about 39 million households and 88% of the nation's kids are estimated to be covered by the enhanced credits.
“It is $3,600 for children under 6 and $3,000 for children between 6 and 17,” said Michael Pabst a Tax Manager with Flagel Huber Flagel.
Half of that credit can be claimed when filing income taxes for the year, but the other half will be paid in monthly installments from now through the end of the year.
“If you were to unenroll or didn’t receive those payments you will get that advance payment of advance credit on your 2021 tax return,” said Pabst.
The amount of the credit goes down for people earning over $112,000 or households making more than $150,000.
But could the credit come at a cost?
“It’s always a stimulus anytime you’re putting additional command over purchasing power which is what the money is your increasing people’s ability to go out and buy stuff,” said Dr. Jeff Haymond, Professor of Economics at Cedarville University.
In three days, that will be true for 36 million American families.
Dr. Haymond says this money will increase purchasing power leading to inflation, “It’s coming on top of tremendous stimulus we’ve already had.”
The government program is intended to fight poverty but may act as a stimulus that encourage spending for things like back to school shopping.
Dayton 24/7 Now’s Mamie Bah asked, “Do you think these child tax credit payments will help at all?”
Dr. Haymond said, “The question is whether the economy as a whole would be made better off both now and in the longer term. One of the things I’m very concerned about is if we build in inflationary expectations economist know that once you build those inflationary expectations, we found out in the 1970’s it’s very difficult to put those back in the box so to speak.”
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More information about the Child Tax Credit can be found at the link here.