Peer-reviewed article
The Child Tax Credit and Family Well-Being: An Overview of Reforms and Impacts
Sophie M. Collyer, Megan A. Curran, Irwin Garfinkel, David Harris, Zachary Parolin et al. ·
Summary
Written by AI, not yet AICS's view · claude-haiku-4-5-20251001This study examines how the U.S. Child Tax Credit (CTC) affects child poverty and family well-being across three periods: before the 2021 expansion, during it, and after it ended. The temporary expansion under the American Rescue Plan extended full eligibility to nearly all children, lifting more than three million children out of poverty. The research also explores how individual states could establish their own CTCs to further reduce child poverty.
Key points
- In 2020, about one in three children were ineligible for the full CTC because it was tied to family earnings
- The temporary ARP expansion moved more than three million children out of poverty during the expansion months
- State-level CTCs could reduce child poverty rates by half, either complementing or replacing federal expansion
- The CTC has become an increasingly important part of the U.S. safety net
Limitations
The document focuses on the United States only and does not provide long-term outcomes beyond the expansion period. It does not examine how the CTC affects other dimensions of child well-being beyond poverty reduction.
Abstract
The Child Tax Credit (CTC) has become an increasingly important element of the U.S. safety net. We discuss the structure of the CTC and its effects on childhood poverty and other indicators of well-being during its three distinct phases: prior to the 2021 American Rescue Plan (ARP) expansion, during the expansion, and after the expansion’s expiration. We also examine recent efforts to establish state-level CTCs. We show that, in 2020, roughly one in three children were ineligible for the full CTC because it is tied to family earnings. The temporary expansion under the ARP extended full CTC eligibility to nearly all of these children, thus moving more than three million children out of poverty in the expansion months. State-level analyses show how states could establish CTCs that reduce child poverty rates by half, either as a complement to an expanded federal CTC or in the absence of a continued federal expansion.