The number of American kids in poverty went up by 3.7 million last month, partly due to the expiration of monthly child tax credit payments. That’s a 41 percent increase and the highest rate since the end of 2020.

Senior research fellow Zach Parolin said Black and Latino children are being disproportionately affected.

“In January 2022, one in every four Black or Latino children lived in monthly poverty, according to our estimates,” Parolin said.

Child tax credit payments were given to families from July to December of last year as part of the American Rescue Plan. The Internal Revenue Service paid out $250 per child aged 6 to 17 and up to $300 per child aged under 6. The payments reached more than 61 million children in over 36 million households.

“A massive policy success in terms of its impact on child poverty, in terms of its impacts on food hardship, and the evidence also suggests that at least for the six months that the policy was around, it didn't do much at all to affect rates of unemployment among parents who were receiving it,” Parolin said.

Robert Campbell, the senior Robert Campbelldirector of policy with Feeding America, says any resource to help get food on the table is important.

“While we can't speak directly to how individuals are using their child tax credit resources, we do know that households with low incomes often spend a large portion of their budget on food, upwards of 30 percent," Campbell said, "And we also know that food-insecure families often have to make tough choices between things like food versus rent or food and medicine.”

Despite the program’s success, there is no momentum to restore the child tax credit payments in Congress. Senators are split on whether to add a work requirement for families who receive the money. Regardless, both Campbell and Parolin say that investing in the country’s most vulnerable lifts everyone up.

“If you're low-income family, you receive these benefits when you have a young child, that child is less likely to face hardship and therefore is more likely to do better in school to go on and graduate high school and to experience a number of long-run benefits as a result of this policy,” Parolin said.

 

Rent is the biggest monthly expense for most Americans, and there are ways renters can use on-time payments to boost their credit scores. But they can't do it alone.

"It would be wonderful to see it evolve eventually into rent payments, making it on to credit reports automatically," said Sara Rathner, a credit analyst at NerdWallet. "That's something that I would love to see because I think so many people would benefit from it. But for now, you do need to use a third-party service."

Those third-party services include special credit cards renters use to pay rent or apps that report rent payments to credit bureaus. But Rathner says many of those third-party services require a startup fee or a monthly subscription rate — unless a landlord agrees to cover the cost.

However, one company, Piñata, offers a first-of-its-kind program that's free to renters. The company provides the service for free by working with businesses that offer rewards on the app while renters build credit.

"For us, it's really about helping people who have lower to mid credit scores; also thin credit files," said Lily Liu, the CEO and co-founder of Piñata.

Liu says Piñata isn't a magic fix for a bad credit score. It would take time for rent payments alone to recover big hits to a poor credit score.

"One of the big risks we always want to remind renters of is that rent reporting is just one small aspect of your total credit score," Liu said. "It's important to look at other major life expenses."

Rathner says it's also important to remember that anything can boost a credit score — just as anything can hurt a credit score.

"Obviously, if you ever have a late rent payment, that can hurt you. It's just kind of like paying any other bill late," she said. "It can appear on your credit report, and it can ding your credit temporarily."

Rathner also recommends that with any rent reporting service, users first look into what will happen if they cancel because of a move or if a user is in dispute with a landlord. Piñata does let users cancel at any time for any reason.

ALBUQUERQUE, N.M -- As difficult as it can be supporting two kids as a single mother, Melissa Martinez says her children are her motivation in life.

“I'm glad that they have each other," Martinez said. "They're a handful.”

Working a minimum-wage job, she says it can often be a struggle to put sufficient food on the table.

“They love their juice, they love their milk, and at one point there was a time when they were limited to resource of milk and formula when he was little, that was scary,” Martinez said.

Martinez isn’t alone. Research analyst Derek Lin with New Mexico Voices for Children says food insecurity was already a big issue in the state of New Mexico and across the county. The pandemic made it worse.

“In New Mexico, before the pandemic, 1 in 4 children suffered from child food insecurity after the pandemic started," Lin said. "That rate went up to 1 in 3.”

In recent months, Martinez says life has been made a little easier thanks to child tax credit payments that were expanded under the American Rescue Plan.

According to U.S. Census data, about 35 million eligible families received the first monthly payment of up to $300 for each child ages 5 and under and up to $250 for each child ages 6 to 17.

“What the administration and Congress did in recent legislation was make available those payments in monthly installments to low-income families, up to $300 per month, and those payments started in July, and we've already seen a very significant impact on food insecurity," said Geoffrey Plague, managing director of tax public policy and government relations with Feeding America.

Plague says the percentage of families indicating inadequate access to food dropped by 24%. Lin says more money in the pockets of families facing poverty can help end the cycle.

“When children aren't able to access enough high-quality food, they're not able to perform well in school," Lin said. "They're not able to do extracurricular activities. There are correlations between food insecurity and academic, behavioral and emotional issues.”

He says if they can’t do well in school, then it's difficult to go on to higher education and a life of better resources. Martinez says she hopes her kids can break that cycle.

“How do we offer them the best when some of us are so limited," Martinez said. "The workforce is hard because we're, we're striving to make the best of those minimum wage jobs, but we can't afford to make ends meet when we have to pay for back to school items. I don’t want them to remember that I struggled. I don’t want them to remember that it was hard for me. I want them to remember that they had really good things."

Martinez says the extra help is needed to be financially stable in a single-income household and she hopes the child tax credit payments will continue.

The current payments will continue monthly through December, but Feeding America is pushing for those payments to become permanent.

“The child tax credit has, for the history of it, for the entirety of its existence, proven to be one of the most effective anti-poverty provisions that we have at the federal level," Plague said.

For now, Martinez is taking it one day at a time. She says she’s thankful the tax credit has helped her give her children adequate food and clothing.

“We bought him new shoes, new sketchers, they even light up,” Martinez said.