Letter to the House Ways and Means Tax Team: Child Tax Credit

Dear Chair Fitzpatrick, Vice Chair Malliotakis, and Distinguished Members of the Working Families Tax Team:

Thank you for the opportunity to submit comments on the upcoming expiration of provisions of the 2017 Tax Cuts and Jobs Act (TCJA). On behalf of Children’s HealthWatch, a national network of pediatricians and child health researchers, we write in support of strengthening the Child Tax Credit (CTC). Specifically, we encourage the Working Families Tax Team to consider the following expansions that center the needs of families with low incomes and respond to financial realities they face across the country:

1. Pass a permanent, fully refundable, and inclusive CTC that ensures all children are eligible for the full credit;
2. Increase the maximum CTC for all children, with a further boosted credit available to young children;
3. Index the CTC to inflation, thereby protecting its value overtime;
4. Allow families to receive the CTC in reliable, monthly payments;
5. Reduce structural barriers to the CTC and other family tax credits by investing in effective, community-driven outreach efforts and providing adequate resources to the Internal Revenue Service (IRS) to improve customer service and operations.

Children’s HealthWatch seeks to achieve health equity for young children and their families by advancing research to transform policy. We accomplish this mission by interviewing caregivers of young children on the frontlines of pediatric care in urban emergency departments and primary care clinics in four cities: Boston, Minneapolis, Little Rock, and Philadelphia. Since 1998, we have interviewed over 80,000 caregivers and analyzed data from those interviews to determine the impact of public policies on the health and development of infants and toddlers.

The TCJA included several changes that strengthened the CTC for working low- and middle- income families. These included doubling the maximum credit from $1,000 to $2,000 per child, lowering the phase-in threshold from $3,000 to $2,500, and increasing and indexing the refundable portion of the credit, now capped at $1,700 per child. These changes reduced taxes for all eligible families, and provided an average of $60 in additional tax benefits to families with children in the lowest one-fifth of the income distribution. (i) However, the phase-in rate and earnings threshold continued to exclude millions of children because their families did not earn enough to receive the full credit. As of 2022, 26% of children – totaling 18 million children nationwide – were excluded from the full credit. Disproportionately, these are young children, children in rural areas, children in larger families, and children in single parent families. This includes 18.6% of children in PA- 1 (26.3% statewide) and 29.2% of children in NY-11 (30.2% statewide). (ii)