Child Poverty

Keeping New York Families Afloat Means Not Letting Them Down: The Need for a Permanent Child Tax Credit

August 5, 2021 | New York

By now, chances are you have likely heard at least something about the expanded child tax credit.  In recent months, it has been widely touted as a vehicle for cutting child poverty in half, is receiving extensive media coverage and is even gaining fame on TikTok – as sure a sign of cultural relevance as any in 2021.  While the child tax credit is not new, the American Rescue Plan temporarily expanded it in transformational ways: increasing its value, making it fully refundable and available to low- and no-income families, and – perhaps most significantly – paying it out in monthly increments.

The expanded child tax credit makes a critical down payment on ending our nation’s shameful legacy of child poverty.  Even prior to the pandemic, children – particularly children of color and very young children – were the poorest Americans.  Over 10.5 million children lived in poverty in 2019, 71 percent of whom were children of color.  Here in New York, 1 in 5 children lives in poverty – a higher percentage than 34 other states, with Black and Hispanic children more than twice as likely as their white peers to live in poverty.  We know that poverty harms children, with income-related gaps in cognitive skills seen as early as 9 months old and impoverished children suffering worse health outcomes in many indicators.  Children living in poverty are more likely to be hungry, less likely to have health coverage or graduate from high school and more likely to be unemployed and poor as adults.  Furthermore, child poverty costs our nation approximately $1.03 trillion annually – and New York over $55 billion – in reduced earnings and increased costs associated with health, homelessness, child welfare and criminal justice.

While a one-year expansion of the child tax credit is a vital starting point, New York families need regular and consistent cash support to ensure child well-being and advance racial equity.  If it were made permanent, the expanded child tax credit could reduce New York’s child poverty by over a third and cut child poverty in half nationally, lifting more than 50 percent of Black children out of poverty.  Permanently expanding the child tax credit would bring 681,000 New York children under 18 either above or closer to the poverty line and benefit 86 percent of New York children under 18.  Making the child tax credit permanent would also generate about $800 billion in benefits to society and return approximately $5.1 billion to New York households.

The urgency of permanency was a focus of our July Keep Families Afloat event, which the Children’s Defense Fund – New York co-hosted with the Educational Alliance.  Featuring Senate Majority Leader Chuck Schumer and Representative Nydia Velazquez, the celebration marked the week families would receive their first monthly checks.  During the event, Leader Schumer assured New York families that “Help is on the way in a very big and significant way” and Representative Velazquez spoke powerfully about our collective responsibility to conduct extensive outreach to ensure every eligible family receives the credit.  Several New Yorkers described the impact the child tax credit will have on their own lives and our Director of Poverty and Health Policy, Ben Anderson, further emphasized the significance of this policy, sharing powerful stories of how poverty has shaped the lives of so many of CDF-NY’s Beat the Odds® youth.

Yesterday, over 700 community-serving organizations led by the Automatic Benefit for Children Coalition (co-chaired by the Children’s Defense Fund) sent a letter to Congress and the Biden administration, imploring them to make the expanded child tax credit permanent and ensure its availability for all families who need it: “Now that you have lifted families up, do not let them down.  Help us secure our children’s futures.”  Their effort comes at a particularly urgent time, as the expanded child tax credit’s future remains uncertain after 2021.  If Congress fails to act, the expanded credit will expire after this year – and expiring along with it will be the progress we are making in combatting the moral and economic threats of child poverty.  In the words of the Children’s Defense Fund’s President and CEO, The Reverend Dr. Starsky Wilson, “We cannot leave the fate of this investment in the winds of an uncertain political future.  In this moment of unprecedented awareness that we are ‘tied in a single garment of destiny’ we must make a guaranteed income for children a permanent fixture in America.”

For more information about receiving the child tax credit, read our newly updated Child Tax Credit Frequently Asked Questions.