The expanded Child Tax Credit was an experiment in financial security: here’s what we learned and what families stand to lose
In July to December 2021, the Biden Administration launched one of the most ambitious enhanced tax credit programs in history in the American Rescue Plan Act, the expanded Child Tax Credit (CTC). For the first time, millions of families received monthly payments of $250 to $300 per child over six months.
For the first time in a decade, the American Rescue plan increased the amount families received through the CTC. Additionally, it was the first time the credit was:
Fully refundable: even if the household has zero tax liability, they can still collect all of the money they're entitled to;
Offered as a monthly payment or lump sum during tax season;
Provided to families with mixed immigration status so long as the eligible child had an SSN;
Expanded to include 17-year-olds.
These payments were not luxuries. Even before the pandemic, low- to moderate-income households waged a constant uphill battle against poverty and inequality — especially families of color, who have been historically overlooked and underserved.
Families reported to SaverLife that the expanded CTC meant more food on the table, help with childcare so parents could go to work, and the ability to save for the future. We observed how enhanced tax credits led to better financial outcomes for families.
When polled about how helpful the monthly Child Tax Credit payments were for SaverLife members who received them, 92% of SaverLife members, who represent low- and moderate-income families nationwide, said they were helpful and made a difference. [1]
“The Child Tax Credit has helped some of us stay in a home, rather than getting evicted.” — Tiffaney, Florida
CTC payments helped families pay their bills, including heating costs during winter. In a recent poll of CTC recipients, 49% said since receiving CTC payments, they are “much more likely to pay them {utility bills} on time and in full.” [2]
If Congress fails to restart the enhanced CTC payments, families will lose out on a critical source of support, in the face of a continued uncertain economic outlook: They will struggle to pay for necessities: stable housing, utilities, food on the table, gas in their cars, and so much more. The lives of America’s next generation are at stake, and parents will lose the opportunity to build financial stability and long-term security.
“The CTC helps you set your kid up for success, whether it is for [a] future down payment on [my daughter’s] house, future educational pursuit, or anything she wants to do, [my daughter] has that cushion.” — Gabriella, Nevada
At SaverLife, we believe that all children deserve a strong start and that investing in families means investing in the future. We will continue to fight for a permanently expanded CTC for the millions of families who have struggled to build financial stability and a hopeful future for their children.
Read the full report here.
Radha Seshagiri (she/her)
Radha Seshagiri is the Director of Policy and Systems Change, SaverLife
[1] Based on a survey of 801 SaverLife members. Responses were collected between 12/20/21 and 12/23/21.
[2] Based on 123 survey responses collected between 12/16/21 and 1/1/22.
