Friday, October 6, 2023

Some States Are Fighting Rising Child Poverty With Tax Credits

From Capital and Main, California

One of the highlights of the American Rescue Plan Act was the federal Child Tax Credit, or CTC, that lifted 3 million children out of poverty. It led to a historic low in the child poverty rate in the second half of 2021, with parents saying that they used the credit payments on rent, child care, utilities, food and school expenses. The credits were effective because they reached the people they needed to target — more than two-thirds of very-low-income families received monthly CTC payments, according to a survey by University of Michigan researchers.

But Congress allowed the credit to expire at the end of 2021, and the child poverty rate more than doubled in 2022, completely reversing any progress, according to recent U.S. Census Bureau data. Read the whole story here