INDIANAPOLIS – The expanded federal child tax credit could help bring continued economic growth to Indiana, some experts say.
The first advance monthly payments have started going out to families. Under the program, eligible families receive monthly payments of up to $300 per child under age 6 and $250 per child ages 6 to 17.
Families will receive the payments by direct deposit or mail, according to officials.
“Depending on how many children you have, it could be a significant increase to your monthly income,” said Sherry Borshoff, an enrolled agent with Borshoff Consulting, LLC, a Central Indiana tax firm.
Families can still decide whether they want to receive advance monthly payments now or a lump sum refund early next year with their 2021 tax returns, Borshoff said.
“You have to weigh whether you want it now or you want it later and what that looks like,” she explained.
Kyle Anderson, an economist with the Indiana University Kelley School of Business, said he expects the child tax credit to make a long-term impact on Indiana’s economy, especially in some industries like childcare.
“We should see some pick up there where families are able to afford more outside childcare,” Anderson said.
Anderson said he expects families will spend the money they receive from the child tax credit.
Combining that with the income tax credit recently announced for all Hoosier taxpayers early next year and the economic recovery so far, Anderson said, that will mean continued progress for the state’s economy.
“I’m expecting that over the next 6 to 12 months, economic growth is going to be really strong,” Anderson said. “We’re in a good period right now, and a lot of the slowdown that we have currently is on the supply side – businesses not being able to serve all the customer demand.”
Families who want to change when and how they receive the payments can do so on the IRS website.
Borshoff suggests talking with a tax professional about the best option for your family.