Expanding Child Tax Credit

A little boy is playing with a busy board. Developming toy for children from one year old. Developming toy for children from one year old. Focus on the busy board

Posted in Development and Learning Policy  |  Tagged

by Annie Foley (GU ’22), June 01, 2021

While listening to a podcast the other week, I was intrigued to hear about the expansion of child tax credit included in the American Rescue Plan, President Biden’s COVID-19 relief bill, and the implications that this will have on millions of families living in the US. Put into simpler terms, this expansion essentially provides a guaranteed income for families with children, a proposal that seemed improbable in the US, especially after the government’s former cash assistance program, Aid to Families with Dependent Children, was abolished in 1996 (Davies, 2021). Thanks to this new piece of legislation, individuals with an income up to $75,000 and couples earning up to $150,000 are eligible to receive $3,000 annually for each child that they have ages 6 to17, and $3,600 for each child under 6 (Leonhardt, 2021). This expanded credit will affect 27 million children, about half of which are Black and Latino, and move 9.9 children above or closer to the poverty line (Trisi & Floyd, 2021). Unlike other forms of government aid that are targeted, the money received by families can be used however they choose. Additionally, as opposed to receiving their benefits annually, families eligible for this tax credit will begin to receive monthly checks as a way of providing more financial stability (DeParle, 2021).

Passed to relieve the financial toll that the COVID-19 pandemic has taken on many American families, particularly families of color, this expanded child tax credit has only been approved for a single year. While the financial situation of families has definitely worsened, the poverty that affected children before COVID, and will continue to long after, would, no doubt, benefit from the continuation of this credit. The effects that this economic security program will have on reducing the hardships of many children growing up in poverty could prove to have meaningful, long-lasting impacts on their lives. Additionally, aside from the impacts that this aid could have on the lives of children, the continuation of these monthly checks would be a massive stance for the United States, the wealthiest nation in the world, to take on its staggering poverty rate. Only time will tell what the country decides to do in the long run, but it will be promising to see the effects that this expanded credit will have on the lives of children and families this year.

References

Davies, D. (2021, April 01). New Guaranteed Income for Families with Children Is ‘Stunning,’ Poverty Expert Says. Retrieved April 02, 2021, from https://www.npr.org/2021/04/01…

DeParle, J. (2021, March 07). In the Stimulus Bill, a Policy Revolution in Aid for Children. Retrieved April 02, 2021, from https://www.nytimes.com/2021/0…

Leonhardt, M. (2021, March 11). Here’s Who Qualifies for the New $3,000 Child Tax Credit. Retrieved April 02, 2021, from https://www.cnbc.com/2021/03/1…  Trisi, D., & Floyd, I. (2021, March 01).

Benefits of Expanding Child Tax Credit Outweigh Small Employment Effects. Retrieved April 02, 2021, from https://www.cbpp.org/research/…