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The Child Tax Credit Empowered Parents, Lifting Millions of American Kids Out of Poverty
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The Child Tax Credit empowered parents to build more stable homes for their children, cutting childhood poverty in half and helping 61 million American children.
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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.
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In 2022, partisan posturing in Congress blocked CTC, causing childhood poverty to surge by 41%.
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In August 2024, Senate Republicans blocked a bill to expand the CTC.
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Under the current CTC, families are only eligible for benefits up to $2,000 per child for the 2024 tax year (filed in 2025).
Prioritizing Families
The expansion of the Child Tax Credit has been the most successful program since WWII at ensuring parents have the support they need to lift themselves and their children out of poverty.
This bi-partisan program empowered parents to make ends meet and gave them the flexibility to spend the cash on what their family needed most, whether that was childcare, housing, or healthy food. The cascading benefits of the program enabled parents to catch up on bills, food, and rent—stabilizing low-income homes across the country and lifting millions of American children out of poverty!
The program's success received broad support from Americans across the ideological spectrum. Conservative evangelicals, liberal progressives, and a vast swath of the silent majority of America sitting in the middle all understand that it serves no one for a child to start their lives anchored in deep poverty.
Americans know that growing up in poverty is one of the biggest barriers to a child's ability to claim the American Dream and reach their God-given potential. It's why our nation has always taken special steps to protect our children and invest in programs that ensure a more equal opportunity for all.
But partisan posturing in Washington last year blocked a continuation of the tax credit. As a result, childhood poverty spiked back up 41% in 2022.
"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, Arizonan and proud father of four
Impact of Child Tax Credit Expansion
In 2021, President Biden signed the American Rescue Plan into law, which included the One-Year Child Tax Credit Expansion. All parents were treated equally and received the same tax credit. But the $3000-3600 tax credit had a much bigger impact on struggling families making only $20,000 than those making $150,000. That is why the Child Tax Credit is so effective at lifting children out of poverty.
The expanded Child Tax Credit gave each parent a tax credit worth $3,000-per-child ($3,600 for children under age 6). Importantly, it made the credit fully refundable for families, ensuring that families struggling the most could fully access the extra help. Additionally, the IRS began issuing monthly payments to families from July to December 2021, covering half of the credit in advance, and ensuring it was spread out and easier to fit into family budgets.
The Expanded Child Tax Credit played a crucial role in preventing millions of children from going hungry as well. Within a week of its implementation, the percentage of households with children experiencing food scarcity dropped from 13.7% to 9.5%. Spending reports indicated families who benefited from the new tax credit utilized it to buy clothing, food, household items, and pay for other necessities for their children and school.
An analysis conducted by the Urban Institute revealed that making the expanded Child Tax Credit permanent would reduce child poverty by an additional 40%, lifting 4.3 million additional children out of poverty and significantly improving the lives of another 16 million kids in low-income households. Overall, 61 million American children benefit from the Child Tax Credit.
With the benefits to American families so clear, religious leaders across the country have implored our elected officials to make the expanded Child Tax Credit permanent. The Conference of Catholic Bishops wrote, “Especially in this moment of economic uncertainty, we urge you to take action to ensure the progress made in the fight against child poverty this past year is not lost and that we build on these gains."
The National Association of Evangelicals, Georgetown University’s Center on Faith and Justice, Students for Life, National Latino Evangelical Coalition, the Episcopal Church, National Hispanic Pastors' Alliance, Bread for the World, and the Evangelical Lutheran Church in America also rallied behind the Child Tax Credit, invoking the Gospel of Matthew and urging lawmakers to care for the “least of these.”
GOP Refused to Renew Expanded Child Tax Credit
Unfortunately, the one-year expanded child tax credit expired at the end of 2021 due to opposition from a coalition of Congressional Republicans. Many of them claimed it was too expensive.
As a result of the partisan posturing, the credit for families was cut in half in 2022, and it was made only partially refundable.
Child poverty surged by 41% in January 2022, the first month without the expanded tax credit.
When given a second chance to do right by hard-working Americans, Congressional Republicans once again blocked the expanded Child Tax Credit in 2024.
The proposed Child Tax Credit expansion would have restored the credit to $3,000 for children 6-17 years old, and $3,600 for children 5 years and younger, as it did under the initial expansion. Additionally, the credit would have be “fully refundable,” meaning that all American families are eligible for the full credit value.
