The Child Tax Credit (CTC) has been a crucial component of U.S. policy aimed at providing financial support for families with children since its inception in 1997. The most significant changes to the CTC came with the American Rescue Plan Act (ARPA) of 2021, which expanded the credit to $3,600 per child under six and $3,000 per child aged 6-17 and made it fully refundable. This change lifted millions of children out of poverty and provided crucial financial support to low-income families.
Vice President Kamala Harris has been a strong advocate for the expanded CTC and a potential Harris administration may seek to further expand these benefits. The ARPA changes to the CTC, such as the increased amount and fully refundable nature, made the credit accessible to many families who previously could not take full advantage of it. The distribution of the credit in monthly payments also provided consistent financial support to families throughout the year.
The impact of the 2021 CTC expansion was significant, with the U.S. Census Bureau reporting a historic low child poverty rate of 5.2% in 2021. The improved financial conditions of families had positive effects on health, education, and household stability. However, the expiration of the expanded CTC in January 2022 led to a reversal of these positive trends, with approximately 3.7 million children falling back into poverty.
Vice President Harris’s support for the expanded CTC suggests that efforts to extend and potentially make permanent the measures enacted by ARPA could be on the agenda for a Harris administration. The Biden administration’s broader goals of reducing poverty and supporting working families align with these efforts. However, navigating legislative hurdles to reinstate and make permanent the expanded CTC will be crucial to ensuring long-term stability and financial security for American families.
The temporary nature of the expanded CTC under ARPA and its subsequent expiration have highlighted the critical role that the credit plays in alleviating child poverty. The abrupt end to the expanded credit has resulted in increased child poverty rates and reversed the progress made by ARPA. To sustain the benefits of the CTC, efforts to reinstate and make permanent the expanded credit will be necessary to ensure the financial security of vulnerable American families.
