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Advance Child Tax Credit Supported Families Experiencing Economic Shocks

The 2021 American Rescue Plan Act significantly expanded the federal Child Tax Credit by increasing the credit amount, making it available to families with no or little income, and disbursing the benefit in advance or monthly payments. This temporary expansion provided families with up to $300 per child over six months, from July – December of 2021.

National data found that families used the monthly payment to purchase food, clothing, school supplies, and to pay bills. (1,2) The additional funds also have been credited with cutting child poverty in half and reduced food insufficiency by 26%. (3) Children’s HealthWatch research demonstrated that the funds also supported family health – compared to those who did not receive the advance payments, parents who received them were more likely to be in good health. (4) These families were also more likely to catch up on rent and maintain stable housing. (5,6)

When Congress failed to extend the expanded Child Tax Credit, its subsequent expiration in early 2022 led to increased food insufficiency, child poverty, and material hardship. (4) Food insufficiency puts children at risk of poor mental and physical health and makes it difficult for them to achieve in school and form relationships with family, friends, and other important adults, like teachers.

This brief was produced in collaboration with the Boston University School of Public Health.