The expanded child tax credit that families received in 2021 helped reduce child poverty across the country, but particularly in the South where families lack a sufficient safety net, according to a paper released last week.
…Researchers found that the smallest reductions in child poverty came in states that had a high cost of living and low poverty rates even before tax liabilities and income sources such as SNAP, SSI, and unemployment insurance were considered. But even in those states, child poverty rates were reduced 40% after the expansion of the child tax credit.
The credit, which was part of the American Rescue Plan Act, not only boosted the amount of money families received (from $2,000 to $3,600 per child under age 6 and to $3,000 for all others) but also extended the age of qualifying children to 17. It also called for the credit to go to families with little or no income — people who previously did not earn enough money to qualify for a child tax credit.
It’s been credited with helping to bring the country’s child poverty rate down to a record low of 5.2% last year. If Congress hadn’t approved the expanded child tax credit in 2021, another 2.1 million children would have been in poverty that year, according to the Center for Budget and Policy Priorities.
The childcare tax credit should have been made permanent. It clearly worked to substantially reduce child poverty, and what’s more it’s the type of program that both parties should be in favor of. As a nation we need kids to do well. It’s not an understatement to say that the future of our country depends on it. The childcare tax credit is an excellent backstop to ensure all kids have a greater opportunity for success.