Absence of Child Tax Credit Could Increase Child Poverty in Future, Study Predicts

A new study predicts that nearly four million children could fall into poverty if the advance Child Tax Credit payment doesn’t arrive this month. The Center on Poverty and Social Policy at Columbia University estimates child poverty jumped to 17% in January from 12% in December, the highest level since December 2020.

Failed to Extend Expanded Child Tax Credit Program

According to Yahoo! News, Congress failed to prolong the expanded CTC program, which was originally included in the Biden-backed American Rescue Plan, which was passed in March 2021, by a vote of 319 to 202.

In addition to increasing the credit amount, allowing for the distribution of half of the credit amount in advance each month, and making the credit completely refundable, the program made it possible for families with little to no income to be eligible for the credit.

People who supported it said it was one of the most significant anti-poverty initiatives in modern history, generating economic relief to millions of families with children, including those living in extreme poverty.

As the analysis stated, during the COVID-19 pandemic, the Child Tax Credits have stabilized family finances, reducing food insecurity for low-income families with children and allowing them to meet other basic needs without negatively affecting employment opportunities, according to the report. 

Child Tax Credit Absence to Also Affect People of Color

As reported by CNBC News, families of color, particularly those of African descent and Latino descent, may face the burden of the check-cutting. According to Columbia University’s projections, the poverty rate among Black children will rise from almost 20% in December to more than 25% this month. The percentage for Latino children might rise from 17% to 24%.

In addition, the report warns that greater poverty rates can result in other potentially harmful side consequences.

It also mentioned that in the months to come, increased levels of monthly poverty, as well as the lack of child tax credit payments, will contribute to rising levels of food difficulty and a general decline in well-being.

Read more:

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Married Couple Can Now File Joint or Separate Income Tax Returns

 

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