SALT LAKE CITY (ABC4) — As tax day approaches this year, you might be wondering how the locals and Utah folks spent their child tax credit. Data from LendingTree’s QuoteWizard provides insight.
Nationwide child tax credits were increased in 2021 by the American Rescue Plan Act, which funded many programs designed to provide financial relief from COVID-19. According to the taxpayer, the law increased the credit from $2,000 in tax relief per child to $3,600 in some cases.
Critics of tax breaks for families and parents might wonder if this program designed to support children’s health development has done what it was supposed to. According to data from QuoteWizard, almost 80% of people used the tax credit to buy food, suggesting a positive net effect on American children. National averages also indicate that clothing is the second highest in terms of money spent, followed closely by housing and utilities.
These trends are also closely mirrored in Utah. 74% of people used the food tax credit, followed by clothing at 43% and housing at 44%, similar to national averages.
This data raises further questions about federal COVID-19 relief programs like the tax credit and stimulus packages. Many critics suggest that an influx of money to consumers through programs like the tax credit could contribute to dramatic inflation in the United States. Increased food spending in Utah and other states due to the Child Tax Credit could contribute to this and perhaps explain the high local food prices.
That being said, it’s hard to refute the evidence that the Children’s Credit does what it’s supposed to do in Utah and around the country: help parents provide their children with basic necessities like food, clothing and housing.
However, it is impossible to say whether future and current parents can expect these high tax credits to continue.