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When parents start to refrain from shopping for their kids, it generally means bad news.
Key Point
- No stimulus package or an increase in the child tax credit is being considered this year.
- Between that and inflation, parents will be forced to cut back on spending not only on themselves but also on their children.
It’s no exaggeration to say that 2022 has been a tough financial year for many parents. And the reason largely comes down to a combination of rampant inflation and lack of stimulus.
Indeed, many states have issued their own stimulus packages this year due to excess funds in their budgets. At the national level, however, economic stimulus packages have not been offered to the general public. And that extends to the boosted child tax credit.
Last year, the child tax credit cap was increased from $2,000 to $3,000 for children ages 6 to 17, and $3,600 for children under 6. The amount of monthly installments accrued to the recipient’s bank account from July to December.
Inflation, on the other hand, has pushed up nearly every conceivable cost of living. Americans these days are paying more for housing, transportation, utilities, food, and apparel. And many have already ruined their savings or racked up credit card debt just to survive.
Unfortunately, there are statistics showing that food shortages are worsening for households with children this year, combined with inflation and an increase in child tax credits. But more nuanced data points show that even middle-class parents struggle without the aid of stimulation.
Parents are reducing children’s clothes
It is common for parents to limit the purchases they make on their own in order to free up more money for the things their children need. Two major clothing retailers – said spending on children’s and baby goods has declined this year. This is generally her one of the last areas where parents reach out, so it shows that many households (even middle-income families) are crumbling under the weight of inflation.
When can parents expect more stimulation assistance?
At this time, it is highly unlikely that a fourth stimulus check will occur in 2022 or in the next few months. Could that change in 2023? It’s possible, but only if the economy really takes a turn for the worse and unemployment starts to skyrocket.
Meanwhile, lawmakers are still fighting to restore some versions of the boosted child tax credit. Nor does it mean that next year’s credits will be worth the same as they were in 2021. Credit is still valid.
However, to clarify, the child tax credit is not repealed in 2022. A family member who could normally claim the deduction could try to take that money away in 2023 when she files her 2022 tax return. However, it’s still months away, so from the start of next year’s tax season, it’s a windfall that parents won’t reach out to for quite some time.
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