In March 2021, the American Rescue Plan expanded the Child Tax Credit. The four main changes are:
- raising the maximum age to 17;
- increasing the dollar value of the benefit to $3,600 for children under the age of 6 and $3,000 for children ages 6 through 17;
- disbursing payments monthly: and
- allowing non-filers to receive the benefit.
The fourth adjustment is the most substantial. It provides another opportunity to increase outreach to disadvantaged families, but it also creates a new challenge of enrolling parents who had not previously filed income taxes, reported a child on their income taxes, or signed up for stimulus payments.
The U.S. Treasury estimated that parents of 2.3 million children were not receiving the CTC as of June 2021. These children were enrolled in Medicaid but did not appear on income tax returns. The Center on Budget and Policy Priorities used data published by the federal Medicaid and CHIP Payment and Access Commission to estimate that parents of an additional 1.6 million newborns are also missing out on the tax credit. The CTC’s uptake varies across the country. Zip-code level analysis mapped by the Tax Policy Center reveals that many of the lowest enrollment rates occur in rural areas, while the largest numbers of children missing out on the CTC live in urban areas.
The Urban Institute estimates that extending the CTC to 2025, as currently proposed, would lift approximately 4.3 million children out of poverty. Based on 2018 American Community Survey data, they forecast that 11 states (including the District of Columbia) would see a reduction in child poverty of at least 50 percent. All other states would see a reduction of at least one-third. At the household level, the benefit is large enough to make a big difference for some families. In 2015, the USDA’s Center for Nutrition Policy and Promotion estimated that child-rearing cost a two-child married-couple family anywhere from $9,330 to $23,380 annually per child, depending upon the family’s income level and the age of the child. These figures represent one-sixth to almost on quarter of a family’s before-tax income.
Federal, state, and local efforts to increase enrollment
State and local governments’ primary roles in implementing this federal program are carrying out campaigns to promote awareness of the CTC. Many participated in the White House Child Tax Credit Awareness Day on June 21, 2021, and continue to host training sessions on the simplified filing portal. Governments also partner with nonprofits, who often provide most outreach and individual assistance. These nonprofits tend to be the same providers that help low-income individuals and seniors file taxes and claim the Earned Income Tax Credit (EITC). In September 2021, in collaboration with the Treasury Department and the White House, Code for America launched GetCTC.org, a user-friendly portal for CTC enrollment, further simplifying the process.
Webinar to explore lessons learned
On Friday, December 10th, the Center for Intergovernmental Partnerships will be hosting a webinar on the Child Tax Credit at 2:00 pm (EST). The Center, in collaboration with the American Public Human Services Association (APHSA) and the National Association of Counties (NACo), will bring together a panel to discuss implementation and outreach surrounding the expanded Child Tax Credit (CTC).
Officials and organizations from state and local governments and the nonprofit space will discuss their varying strategies for connecting with the parents of children who are not receiving the CTC. Led by the Academy’s Joe Mitchell, they will explore what aspects are working, what can be improved, and where better collaboration and communication across levels of government might generate better outcomes for the CTC and similar programs. Luke McGowan of the White House Office of Intergovernmental Affairs will provide opening remarks. APHSA and NACo will talk about their organizations’ efforts around the CTC.
Panelists:
- Gabriela Lastres, Senior Policy Advisor at the Office of County Judge Lina Hidalgo, Harris County (Houston, TX)
- Cristina Cave, Community Relations Senior Manager at Baker Ripley of Harris County (Houston, TX)
- Isabel Dickson, Economic Mobility Specialist at the Department of Public Health and Environment (State of Colorado)
- Katie Rast, Director of Community Impact at the San Diego Foundation (San Diego, CA)
Please use this registration link to receive the Zoom information and sign up to attend this event.
Written by Nancy Augustine (Director) and Zamira Rodriguez (Research Associate), Center for Intergovernmental Partnerships. This post was updated on December 17, 2021.