Mental Health Access Through Tax Credits: Giving Back to Our Parents and Guardians

Abby Ling

The state of adult mental health has been a focal point across cultures, communities, and countries in the shadow of the COVID-19 pandemic. At its onset, the pandemic obstructed lives across the world and further strained the psychological well-being of billions.

“People are having a hard time making ends meet, that’s making parents stressed out, and that’s causing kids to be stressed out,” shared Dr. Philip Fisher, a professor of psychology at the University of Oregon. During the pandemic, interactions were restricted to video calls. Unemployment more than tripled. And the national death rate spiked by 19%, the largest in 100 years. The world fell into unprecedented social and economic disarray.

The instability and unpredictability of this time could have resulted in heightened stress, anxiety, and aggravated mental health concerns among people across the nation. However, research found that this period didn’t lead to a widespread national mental health crisis. It was instead reported that there was a significant reduction in poor mental health symptoms, particularly among Black and Hispanic adults.

How is that possible? In part due to the expanded federal Child Tax Credit (CTC).

The 2021 American Rescue Plan Act (ARPA) expanded the federal CTC, temporarily removing the minimum income requirement – thus, effectively reaching households previously ineligible for the credit – and providing monthly supplemental payments to millions of more parents with children. Under the expanded guidelines, increased financial support exponentially benefited historically marginalized groups.

The official poverty measure (OPM) for Black households dropped from 19.6% in 2020 to 17.1% in 2022, following the expanded CTC’s expiration and determining the positive impact of the tax credit’s increased benefits. Underrepresented communities are often under stress from financial burdens and are the most susceptible to poor mental health. According to the University of California San Francisco (UCSF), the 2021 amendments to the federal CTC not only reduced poverty rates but also produced notable improvements in

  • Recorded symptoms of anxiety and depression. Anxiety symptoms among federal CTC recipients were reduced by 13.3% from a 25.5% baseline level.
  • Mental health benefits among racial and ethnic minority groups. Improvements in mental health symptoms were shown to be the greatest among adults from Black, Hispanic, and other racial and ethnic minority backgrounds.
  • Effective relief within a short timeframe. Results indicated that moderate anxiety symptoms faced a rapid decline when households began to receive monthly supplemental payments as part of the 2021 tax credit expansion. Recorded depression symptoms also decreased in the months following the first monthly payment.

Mental health remains highly stigmatized within underrepresented communities, and it’s not without cause.

In a 2022 published paper from the UC Berkley School of Public Health: African Americans, Native Americans, and Latinos with untreated mental illness were more likely to be living in poverty, incarcerated, and/or self-reporting to be in ‘fair’ or ‘poor’ health. Because of this, members of these minority groups are vulnerable to facing ‘double jeopardy,’ or being stigmatized for both their mental illness and racial identity and experiencing greater challenges than others with mental health illnesses.

Research indicates that racial and ethnic minority groups are at a higher risk of facing stress and poor mental health due to an increased likelihood of experiencing financial shortcomings and long-standing systemic inequities in income, housing, and food security, among other socioeconomic factors compared to their non-Hispanic, white counterparts. Lack of insurance and healthcare costs are also major contributing factors that prevent households of color from accessing needed medical treatment. And without employer-sponsored coverage, uninsured individuals can be barred from paying for mental health care that can quickly reach thousands of dollars in treatment. In 2021, one in five uninsured adults forwent needed medical care due to cost.

Why Can’t Families Make Use of the Current Tax Credit Rate?

The current federal CTC does not reach all low-income families. Under the current tax code, Black and non-white Hispanic families are disproportionately impacted by the tax credit’s eligibility requirements with 45% of Black children and 42% of Hispanic children unable to receive the full credit due to household income earnings that are ineligible to receive the full tax credit value. By re-expanding the federal CTC to its 2021 benefits, all parents, regardless of income, would receive the full credit, providing them with financial wiggle room to support their family and themselves in ways that may not have been previously considered or accessible.

The CTC is one of many resources that need to be protected and expanded to support the mental well-being of our nation’s adults. That said, it’s crucial to recognize that revitalizing this generous federal tax credit is not the sole solution to support mental well-being. Several policy changes, as well as ongoing societal and cultural demands to destigmatize mental health, are necessary to dismantle disparities that bar underrepresented groups from accessing high-quality healthcare and an equitable tax code. However, the re-expansion, and ultimately the permanent expansion, of the federal CTC is a necessary step to ensure all adults and parents have access to the resources and income needed to care for themselves and their families.