Krystle Urban and children

Krystle Urban poses with her sons Axel, left, and Ryder.

As Congress debates extending the expanded child tax credit as part of the Democrats’ social spending bill, one Nashua mom is feeling the impact the credit has made in her life.

“I’ve just been able not to stress,” said Krystle Urban, mother of Ryder, 11, and Axel, who is almost 4. “I’m not stressing like, ‘what bill do I pay? Do I pay my cell phone bill, or make sure we have internet, or keep the lights on?’”

Urban said the child tax credit is helping to keep her in the workforce, but whether the credit is helping keep parents at work has been the subject of debate as Congress considers the question of extending the credit or making it permanent or letting it expire at the end of this year.

Competing analyses have come up with different answers to the question of how the credit impacts parents’ participation in the workforce.

A University of Chicago analysis, based on economic models, estimated the expanded child tax credit, along with proposed changes to work requirements to be eligible for the tax credit, would reduce the workforce by about 1.5 million nationwide.

But a survey conducted by the University of Washington in St. Louis, found that almost 94% of parents eligible for the child tax credit would keep working, or take more hours because of the extra cash, though about 11% of parents of babies and toddlers said the money would help them stay home. The University of Washington researchers also said that studies of existing “basic income” pilot programs running in some cities have not shown a decrease in the workforce.

Benefits cliff

For Urban, though, the effect of the tax credit is clear.

“I can continue to work and keep my kids in day care,” she said. “It’s helped me continue to live, and continue to be a productive person.”

Urban said she is in recovery and regained custody of her children last year. As she has rebuilt her life after years of substance use, she has run into a phenomenon sometimes called the “benefits cliff,” when a higher-paying job makes someone ineligible for programs like the Supplemental Nutrition Assistance Program or food stamps, or Temporary Assistance for Needy Families payments, but the new income doesn’t make up for the lost benefits or can’t cover the cost of child care needed for a parent to work.

When Urban’s volunteer work at a Nashua recovery center led to a full-time job earlier this year, she worried the loss of public assistance would mean she would have to cut back in other ways. She worries most about not being able to buy fresh fruit and vegetables for her boys.

But when the American Rescue Plan, the Biden administration’s $1.9 trillion COVID stimulus bill was signed into law in March, Urban became one of the tens of millions of parents available for a temporarily expanded child tax credit. Unlike the traditional tax credit, payments from the expanded credit come in monthly installments, rather than a lump sum at tax time.

The payments — $300 for each child under 6, and $250 for each child between 6 and 17, meaning Urban’s family gets $550 per month — have helped smooth Urban’s transition from public assistance, she said. She has been able to put her bills on auto-pay and sock away some money for emergencies, she said.

“I can continue to work and keep my kid in day care,” she said. “All those things normal people do — but it’s different when you’re coming off 10 years of active use.”

Urban said the payments wouldn’t tempt her to leave the workforce. “You can’t really live off the state,” she said, since she knows receiving assistance means putting in at least 30 hours a week of volunteering or job training — she’d rather work for better pay and benefits.

The tax credit does not provide enough for Urban to quit work, she said. But it gives her family a little extra security. “It just allows me to continue what I’m doing for my kids,” she said.