Throughout the pandemic, the federal government used an expanded child tax credit program to give families direct cash assistance to offset job loss and lack of access to child care. Now, research is emerging that shows the expanded child tax credit had a direct impact on reducing child poverty, describes how families used those funds, and demonstrates the overall positive effects on family and child well-being.
"New data show that due chiefly to the Child Tax Credit, child poverty fell sharply in 2021 and reached a record low of 5.2 percent."
Child Tax Credit Improvements Must Come Before Corporate Tax Breaks - Center for American Progress
"The magnitude of the impact of the CTC was due to three major changes: 1) an increase in the size of the credit, 2) expanded access, and 3) changes to the structure of the credit."
"Census Bureau surveys found that 91 percent of low-income families—those with incomes below $35,000—used their monthly CTC payments to cover the cost of basic necessities such as food, housing, utilities, clothing, and education to ensure that their children had healthier, more stable environments."
"We found that the monthly 2021 CTC reduced the experience of material hardship, and in particular food hardships, in ways that were likely meaningful to families."
Expanded Child Tax Credits Have Been a Lifeline for Many - Center for American Progress
"About two-thirds of all recipients used CTC payments to build a financial buffer for the future, either by saving the money or by paying down debt. Both of these uses build wealth and thus provide households with more financial leeway to handle emergencies."