On Monday, the Children’s Defense Fund (CDF) and the Center for the Study of Social Policy (CSSP), along with more than 20 partner organizations, sent a letter to Congress calling for critical changes to the child tax credit (CTC). The letter urges Congress to make the CTC function more like a child allowance by distributing it monthly and to ensure that the most hard to reach populations are centered in COVID-19 negotiations.
President Biden has proposed the next COVID relief package include an expansion of the CTC, modeled off of the American Family Act. The Biden plan would make the CTC fully refundable – removing the earnings threshold so the credit would kick in at zero dollar earnings – and increase the credit form $2,000 per child for children zero to 16 years old, to $3,600 for children under six years old and $3,000 per child ages six through 17. While these are important steps, more critical changes are needed in the final relief bill to increase access, distribute the cash benefit monthly, and implement it in an equal and just way.
As we have long stated, the current CTC has deep structural flaws that prevent millions of children and their families from accessing the cash benefit, including the fact that 23 million children do not qualify simply because their families do not earn enough income to qualify. . What’s worse, for children who do qualify, accessing the CTC is very difficult and time-consuming for busy families who are juggling a lot or not connected to the tax code and would prefer to receive the benefit monthly as opposed to once a year to help cover their daily expenses. That means a policy designed to help children currently doesn’t reach those who need it the most – including immigrant families in which children lack Social Security Numbers, Black and Hispanic families where half of these children do not get the CTC, and hard to reach populations like children in the child welfare and juvenile justice systems and unhoused youth.
As outlined in our letter to Congressional leadership, making these critical changes would dramatically cut child poverty and reduce racial disparities. According to the Center on Poverty and Social Policy at Columbia University, making the CTC refundable and raising the benefit level would cut child poverty overall by almost 45 percent. These improvements would also significantly reduce racial disparities, cutting Black child poverty by 52 percent, Hispanic child poverty by 45 percent, Native American child poverty by 62 percent, Asian American and Pacific Islander child poverty by 37 percent, and White child poverty by 39 percent.
We urge Congress to prioritize these changes in the next COVID relief bill and expand upon President Biden’s CTC proposal by:
- Making the expanded CTC available via monthly payments as the default and ensuring that families automatically receive payments if they have previously filed taxes.
- Ensuring the expanded CTC is easy to access online with dedicated, culturally competent, and multilingual resources, including resources for families who do not usually file taxes, and establishing data sharing between agencies, so families who are already on benefit programs like SNAP, TANF, and SSI know about these changes.
- Making the CTC available to all children in need, including children in immigrant families, children living in U.S. territories, children in large families, and children involved in child welfare and other intervening systems.
- Including strong language to ensure the CTC is exempt from garnishment by debt collectors, eliminating the asset test, and ensuring families are held harmless for overpayments.
A society should be measured by how it treats its children. America will be judged by how we help our children and families who are struggling amidst our parallel crises of COVID-19 and systemic racismExpanding and improving the child tax credit is a critical step toward living up to our country’s promise to our children.
Find the full letter to Congressional leadership here.