Taking a Stand for Children Through the Child Tax Credit

Tiffany E. Browne

For more than 20 years, Stand for Children Day has raised awareness on issues critical to children. From access to quality and affordable health services to meaningful investments in the public education system, advocates across the nation have amplified the voices of children and families to inform policies that ultimately have an impact. Among their priorities this year is permanently expanding the Child Tax Credit (CTC) to assist families and give children a fair shot at stability and the opportunity to thrive into adulthood.

The COVID-19 pandemic undoubtedly harmed families across the country, socially and economically.  Many faced unemployment, rising childcare costs, and much more. Federal leaders took necessary steps to address these hardships and provide relief for families by passing the American Rescue Plan. The plan increased the Child Tax Credit from $2,000 to $3,000 for children under the age of six and $3,600 for children over the age of six, and raised the age limit from 16 to 17. However, this effective anti-poverty measure was only temporary. Once the CTC expansion expired, families were left without the critical support needed to help offset some basic household costs, like childcare and groceries.

Although we have reached a point where COVID-19 is no longer a global health crisis, families and children still have much to contend with. Alongside widening achievement gaps and a mental health crisis, inflation is hampering families’ ability to make ends meet. Economic barriers can negatively impact a child’s quality of life including their health, social emotional well-being, and their ability to perform at a high level at school. Poverty can often lead children to drop out of school, which perpetuates a cycle of generational poverty.

The temporary expansion of the CTC disrupted this cycle of financial distress. Prior to COVID-19, the child poverty rate in the U.S. was on a steady decline, hitting a record low in 2019.  According to Child Trends, the child poverty rate stood at 15.7 percent in 2019. By 2020, the rate increased to 17.5 percent, which translates to 12.5 million children living in poverty, or 1.2 million more than in 2019. Latino and Black children are the most widely affected communities, with the poverty rate increasing from 23 percent to 27.3 percent among Latino children, and from 26.4 percent to 29.2 percent among Black children. The temporary expansion of the CTC helped contribute to a historic drop in poverty rates in 2021. The CTC also represented an investment in this nation’s children, as research finds it has “the potential to dramatically improve their lives—and their academic outcomes.”

While Congressional lawmakers have allowed the CTC to languish after its expiration, the Institute on Taxation and Economic Policy (ITEP) reports that so far, 10 states—including California, New Mexico, Colorado, New York, and New Jersey—have adopted a state CTC to fill the gap for low- and middle-income households. With the end of the American Rescue Plan, advocates have continued calling on state legislators to pass permanent CTC measures that will provide families with needed financial relief. 

While it is not immediately clear when federal lawmakers will revisit discussions on permanently expanding the CTC, states are gradually stepping up to mitigate financial difficulties for families with children. Implementing and expanding state-level CTCs is an important step to helping secure a stable future for some of our nation’s most vulnerable: children. Federal lawmakers can build on the success of these credits by permanently expanding the federal EITC to advance economic security and overall well-being for America’s families and children.