The pandemic-era expanded Child Tax Credit taught us the effectiveness of child-centered policy that sparks economic mobility and removes obstacles to child well-being. Its impact was powerful and immediate, yet Congress chose to discontinue the credit in December 2021. The American Family Act of 2023, introduced today in the US House, gives Congress a chance to correct their mistake and builds on the pandemic-era lesson by restoring the fully refundable Child Tax Credit (CTC) to millions of families. CDF calls on members of the House to pass the American Family Act without delay.
The American Family Act will increase CTC payments for children under 6 years of age from $2,000 to $3,600 annually and from $2,000 to $3,000 for children between ages 6 and 17. Prior results demonstrate this is the right thing for America’s families. The expanded CTC of 2021 kept 3.7 million children out of poverty and reduced insufficiency among families by 26%, as families used CTC funds to pay bills, buy food and groceries, pay their rent or mortgage, purchase clothing and shoes, and pay down debt. Extended legislation in 2021 also promoted family well-being, as 70% of caregivers reported that it made them feel less stressed.
The American Family Act also:
- Ensures the Child Tax Credit is accessible to over 15 million children, making the credit fully refundable and removing earnings requirements;
- Provides for monthly delivery of the credits so families can access these monthly payments as their bills arrive;
- Indexes the credits to inflation to preserve the value of the credit moving forward;
- Extends the credit to families living in the United States Territories; and
- Guarantees all children receive the same value of the credit in their first year of life, regardless of what month they’re born.
According to an analysis by the Center for Budget and Policy Priorities (CBPP), failure to extend the CTC means that 10 million children could be pushed into or slip deeper into poverty. Black and Brown children’s poverty rates would almost double, completely eroding the reduction in child poverty seen between 2020 and 2021. In addition, the expanded CTC would be critical for toddlers as one in six children under 5 (3 million children) were poor in 2021, the highest rate of any age group, according to CDF’s State of America’s Children® Report 2023.
CDF urges Congress to pass the American Family Act to ensure CTC payments in the pockets of millions of families as soon as possible. This legislation is not just an investment in America’s children and families; it is a statement of our values and commitment to framing a nation where marginalized children flourish, leaders prioritize their well-being, and communities wield the power to ensure they thrive.