Article Summary –
- The Child Tax Credit empowered parents to build more stable homes for their children, cutting childhood poverty in half and lifting 2.9 million children out of poverty.
- In 2021, child poverty fell to its lowest level ever in America as low-income parents were able to catch up on food, bills, and rent.
- In 2022, partisan posturing in Congress blocked CTC, with surging childhood poverty 41%.
- The proposed expansion would benefit 16 million children in its first year.
(Read the Latest Update on the Child Tax Credit in 2024)
Child Tax Credit Empowered Parents, Lifting 3 Million American Kids Out of Poverty
The success of the Child Tax Credit (CTC) was evident as it lifted 2.9 million children out of poverty and cut childhood poverty in half. The program empowered low-income parents to catch up on their expenses, leading to the lowest levels of child poverty in America in 2021. However, partisan politics in Congress blocked the continuation of the CTC, resulting in a 41% surge in childhood poverty in 2022.
Prioritizing Families: The Success of the Child Tax Credit
The expansion of the Child Tax Credit has been hailed as the most successful program since WWII in lifting families out of poverty. This bipartisan program provided parents with the flexibility to use the cash on their family’s most pressing needs, such as childcare, housing, or healthy food. This support allowed parents to stabilize their homes, catch up on bills, and lift 3 million children out of poverty.
The success of the program garnered support from a diverse range of Americans, including conservative evangelicals, liberal progressives, and the silent majority. It was evident that starting a child’s life in deep poverty would not benefit anyone, hindering their ability to reach their full potential and achieve the American Dream.
Partisan Politics Blocks Continuation of the Child Tax Credit
Despite its success, the expansion of the Child Tax Credit was not extended due to partisan posturing in Washington. As a result, childhood poverty spiked by 41% in 2022, affecting real families and dimming their prospects for the future.
However, this also highlights the effectiveness of the program, as nearly half of the children lifted out of poverty were able to avoid falling back into it.
The Benefits of the Child Tax Credit for Families
Children who have enough to eat do better in school and have fewer health complications. For low-income working parents, this can mean the difference between keeping a job and losing it due to taking time off for a sick child. The program also allows parents to work harder and better, reduces the risk of divorce, and provides room for unexpected expenses.
The Child Tax Credit is a good policy that protects children, supports families, and provides equal benefits for all.
“I lost my job during the pandemic, and my wife and I had to deplete our savings to help pay the costs of raising our family. I’m now working full-time again, and the tax cut our family received thanks to the expanded Child Tax Credit is helping us build our savings back again so we’ll be able to face the unexpected expenses that come with raising four kids.”
– Benny, a proud father from Arizona.
One-Year Child Tax Credit Expansion: A Successful Effort to Combat Poverty
In 2021, President Biden signed the American Rescue Plan, which included the One-Year Child Tax Credit Expansion. This expansion treated all parents equally and provided a $3,000-per-child tax credit ($3,600 for children under age 6). It also made the credit fully refundable for struggling families, and the IRS issued monthly advance payments from July to December 2021, easing the burden on family budgets.
The expansion also played a crucial role in preventing children from going hungry. Within a week of its implementation, the percentage of households with children experiencing food scarcity dropped from 13.7% to 9.5%, and families utilized the extra assistance for essential needs like food, clothing, and household items.
An analysis by the Urban Institute revealed that making the expanded Child Tax Credit permanent would reduce child poverty by an additional 40%, benefiting over 4.3 million children. Many tax economists also agree that the American Rescue Plan Act has been more effective than most policies in the past 50 years in protecting children and saving lives.
Religious leaders across the country have urged lawmakers to make the expanded Child Tax Credit permanent, citing the Gospel of Matthew and the importance of caring for the “least of these.”
New Bills Aim to Make Child Tax Credit Expansion Permanent
While American families did not benefit from the child tax credit expansion in 2022, a bipartisan deal is being negotiated in Congress to extend it through 2025. The bill recently passed the House Ways and Means Committee and will soon be heard on the House floor. However, this would only be a temporary measure, and what American families need is a permanent extension of the Child Tax Credit. The proposed expansion would benefit 16 million children in its first year. With this support, parents will be able to provide for their children, reduce poverty, and ensure their children have full bellies and stable housing.
Who is Eligible?
Families with children who are dependents, under the age of 17, and have a Social Security Number that is valid for employment in the U.S. are eligible for the child tax credit. An extensive list of requirements is available on the IRS website.
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