Eligible parents are slated to receive their monthly child tax credit payments starting Thursday. How you use the money could affect your business or help you start one

The American Rescue Plan Act of 2021 expanded the tax credit to $3,600 per child under the age of 6, and to $3,000 for those aged 6 to 17. It's in effect just for 2021, though President Joe Biden has advocated for making it permanent

Half of the funds will be sent to parents in installments through December. For example, a parent with one child under six would receive $300 per month. Parents can claim the rest upon filing taxes for 2021--unless they opt out so they can receive all of the money when they file. 

Madilynn A. Beck, founder and CEO of Palm Springs, California-based Fountful--an app that provides "lifestyle services" like manicures or DJ appearances on demand--is considering that approach. Beck says that if she meets her business goals this year, Fountful could generate enough revenue to significantly increase her tax burden come next April. "I'm keeping my head above water now," she says. "What happens if I am fully underwater then and don't have a life vest?" 

The child tax credit will affect people at a "wide range" of income levels, says Daniel Milan, managing partner at Cornerstone Financial Services based in Southfield, Michigan. For aspiring entrepreneurs, it might offset child care costs for a few months while they work on getting a business off the ground. For others, the money could just help alleviate daily financial stress.

That's the case for Ruby Taylor, CEO and founder of Baltimore-based Financial Joy School, which provides financial literacy education and produces a card game that teaches the subject to young people. In April 2021, she and her wife's financial situation changed as a result of the pandemic but they still had to cover things like a new roof and fence for their house. Their savings account dwindled, and Taylor's anxiety spiked, resulting in her going on blood pressure and anxiety medication. The extra $500 the mother of two expects to receive means the couple can build up their safety net again, taking the pressure off both of them.

"When she's not stressed, I'm not stressed," Taylor says. It "will help the business indirectly, because I can be more productive." 

Parent entrepreneurs face the additional challenge of staying present with spouses and children, says James Oliver Jr., founder and CEO of ParentPreneur Foundation--an Atlanta-based nonprofit that supports Black parent founders financially and with an online community (of which Beck and Taylor are both members). Monthly payments "could be the difference [between] sending the kids to summer camp, buying additional groceries, taking a little vacation, or taking the kids to the amusement park once a month to help the family bond," he says.