Update on the child tax credit — Concerns that a $300 monthly payment would persuade 1.5 million parents to quit their employment.

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FEARS are growing that the $300 monthly child tax payments could tempt as many as 1.5million parents to quit their jobs.

As President Joe Biden considers whether to extend the payments until 2025, many have argued this could lead parents to leave the workforce.

According to a recent study, as many as 1.5 million parents could leave the workforce due to the extended payments, as reported by CBS News.

They would represent 2.6 percent of all working parents.

The study was done by University of Chicago economist and expert on poverty and safety nets Bruce Meyer.

While the earlier version of the benefit required families to owe taxes on their incomes to qualify, currently parents don’t need to be working to benefit from the monthly payments.

“The proposed expansion would get rid of the strong work incentives under the prior CTC; it would essentially eliminate a tax credit that encouraged work and replace it with something that discourages work,” said Meyer.

Because of these concerns, many, including senator Joe Manchin have suggested the payments should include a work requirement.

Read our child tax credit live blog for the very latest news and updates…

However, proponents of extending the payment argue that the previous structure of the benefit did not help children living in poverty, and only reached families earning more than $50,000.

As CBS points out, not all economists agree with Meyer. In fact, more than 400 economists signed a letter in support of the expanded Child Tax Credit last month.

According to Meyer’s estimate, child poverty would fall by 22 percent even if 1.5 million parents stopped working because of the payments. By comparison, he claims there would be a 34% reduction in child poverty if the payments don’t affect workforce participation.

The child tax credits are worth up to $3,600 per child under six in 2021, $3,000 per child between six and 17 and $500 for college students.

They’re automatically issued as monthly advance payments of between $250 and $300 until December, unless you opt out.

The remaining cash – up to $1,800 – is then given out once the IRS has processed your 2021 tax return in 2022.

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