Children’s HealthWatch Statement on Child Tax Credit Agreement

This week, Congressional leaders announced a bipartisan Child Tax Credit agreement that prioritizes families with low incomes and is estimated to lift 400,000 children out of poverty this year. The announcement comes following pressure from Congressional champions and advocates to ensure that any tax deal for corporations is paired with relief for families and children.

Research from Children’s HealthWatch and others on the 2021 advance Child Tax Credit showed its incredible health and poverty reduction impact. When families had more resources, they could purchase more and healthier food, were better able to pay their rent, parents were in better health, and could buy the things their children needed, like clothing or age-appropriate toys and books.  These all have long-term, significant benefits for children’s health, development, and growth, and their parents’ overall well-being. Following its expiration in 2022, food insufficiency surged again and child poverty nearly doubled.

While the current tax deal falls short of restoring the American Rescue Plan Act’s version of the Child Tax Credit, it is a step in the right direction. If passed, 16 million children would benefit from the expansion. This represents more than 80 percent of children currently left out of the full credit because their families earn too little. Specifically, the deal would:

  • Change the way the Child Tax Credit phases in so that families with low incomes receive a per-child benefit, as higher-income families already do;
  • Lift the refundability cap from $1,600 to $2,000 over 3 years, providing a larger credit to families with low incomes;
  • Allow families to choose to qualify for the credit by using either their current or prior year earnings, helping families with income fluctuations;
  • Index the maximum Child Tax Credit to inflation in tax years 2024 and 2025, to ensure the CTC keeps up with real-life costs.

The bottom line is that these changes will help children and families now. Children’s HealthWatch supports these expansions and continues to urge Congress to pass critically needed expansions to the Child Tax Credit.

While we celebrate this meaningful first step, we will relentlessly continue our work to make the Child Tax Credit available to all children living in the U.S. This includes making the credit fully refundable and available to families of all incomes and restoring eligibility to the 1 million immigrant children who are currently excluded. We look forward to continuing our research and advocacy to advance a fully refundable and accessible Child Tax Credit that will uplift our communities and help all children thrive.