The Loss of the Expanded Child Tax Credit is a Loss for our Children
By Alison Maurice, Alliance to End Hunger
It has been a year since Congress passed the historic American Rescue Plan (ARP) in response to the continued hardships of the COVID-19 pandemic. The package made critical investments in domestic nutrition programs, such as extending Pandemic EBT (P-EBT), a 15% boost in Supplemental Nutrition Assistance Program (SNAP) benefits, and additional investments in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and senior nutrition programs.
The ARP also expanded the Child Tax Credit (CTC) through an increase in the credit and advanced monthly payments to families, as opposed to the typical annual tax season payments. However, one of the most crucial and consequential change to the CTC was its ability to reach households that previously did not earn enough income to be eligible.
“One of the most crucial and consequential change to the CTC was its ability to reach households that previously did not earn enough income to be eligible.”
From July to December 2021, the advanced monthly payments provided a lifeline helping parents put food on the table for their children. In fact, according to the U.S. Census Bureau, the expanded CTC benefit proved to be an effective tool for addressing childhood hunger. Nearly half of parents who received the monthly child tax credit used the money for food. Columbia University’s initial CTC research found that the first monthly CTC payment was associated with a 25% decline in food insufficiency (sometimes or often not having enough to eat in the last 7 days) for households with children. Further, Columbia’s research found that the CTC’s greatest impact on reducing food insufficiency was concentrated among families with 2019 pre-tax incomes of less than $35,000, and benefits strongly reduced food insufficiency among low-income Black, Latino, and White families alike.
Unfortunately, the expanded monthly CTC benefit ended in December 2021, and by January 2022 — just one month after families lost the expanded monthly credit — 3.7 million more children were pushed into poverty. Children living in poverty face numerous uphill battles, including accessing nutritious foods. Children who struggle with hunger have poorer academic outcomes and are at a higher risk of developing diet related diseases. Allowing the CTC to return to the status quo is a choice that will hinder an equitable recovery from COVID, as revealed by the rapid increase in child poverty just one month after the expanded monthly tax credit expired.
“Just one month after families lost the expanded monthly credit — 3.7 million more children were pushed into poverty.”
Congress must prioritize children and ensure that low-income families have the resources they need to feed their children. We need to push a strong and united call on Congress to invest in long-term solutions and expand the CTC while ensuring the credit is inclusive of all low-income families with children. The expanded CTC proved its real and immediate effect on a family’s financial freedom to prioritize spending as needed. Losing the expanded credit put children directly back into hardship and will cost our country dearly in the future. Congress must act now.
