Binnan Wang (Case Western), Where People Spend Their Child Tax Credit, 173 Tax Notes Fed. 1061 (Nov. 22, 2021):

In this report, Wang examines the different ways the automatic child tax credit is being used by various categories of taxpayers, and she explains why the payments have become a penalty for some middle-income
taxpayers.

Conclusion
The advance CTC increased the maximum amount of the credit, lowered the refundability threshold, and made the annual refund payments monthly. The monthly form of payments gives taxpayers the opportunity to choose how to use the payments. It also meets the needs of different categories of taxpayers according to marriage status, household income, and household size.

However, these CTC changes were prompted by the COVID-19 pandemic, and they are temporary. The analysis above suggests that taxpayers will need these adjustments even when the immediate impact of COVID-19 disappears. Making the advance CTC permanent would be a significant help.

Although most of the recent CTC changes are positive, they are not perfect. In the future, expanding the phaseout threshold would be an essential step to ease the income penalty and marriage penalty for some middle-income taxpayers. Also, the monthly form of payment is a kind of subsidy for people whose income is within the advance CTC phaseout threshold amount, while higher-income taxpayers still need to claim the tax refund at the end of the tax year. This situation will confuse people who are eligible for the refunds, thus affecting the social result.