Close to four million more children are living in poverty two months after the expiration of the expanded Child Tax Credit (CTC), according to a report by Columbia University's Center on Poverty and Social Policy.
The White House said in June 2021 that CTC sign-up would help provide children "a lifeline out of poverty" and projected that related measures had the potential to reduce child poverty in America by 50%. The monthly payments of up to $300 per child were a component of President Joe Biden's American Rescue Plan, aimed at providing families with financial and economic relief during the COVID-19 pandemic.
Latino and Black children saw the highest poverty increase, according to the Columbia University report, as those communities experienced an increase of 7.1 and 5.9 percentage points, respectively, from December 2021 to January 2022. In fact, the report noted that the overall child poverty rate rose 41% during that time period.
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Child poverty rate dropped once CTC payments rolled out, according to report
The initial Child Tax Credit maximum amount was raised from $2,000 for eligible taxpayers to $3,600 per child up 5 years old, and $3,000 per child under the age of 18. The Internal Revenue Service (IRS) paid out half of the full credit in 2020 through monthly advance payments of $300 or $250 per qualifying child, depending on their age.
In January, a group of Senate Democrats penned a letter to President Biden and Vice President Kamala Harris, urging them to reinstate the expanded CTC through the Build Back Better Act (BBB). They described the payments as "the biggest investment in American families and children in a generation."
Columbia University’s report indicated that the expanded CTC payments helped bring many children out of poverty. For example, it noted that the child poverty rate was 15.8% in June 2021, just before the increases payments began to roll out. At the onset of those payments that rate dropped to 11.9% after 39 million families began receiving the checks, the study shows.
Families that are no longer receiving monthly CTC payments and looking for ways to prepare for unexpected expenses could consider a high-yield savings account. Building your savings through one could help you save more money over time. Credible can help you find a high-yield savings bank account provider and interest rates that will boost your savings.
Nearly 10 million children could fall below poverty line without expanded CTC: report
Before the expiration of expanded CTC payments, a report by the Center on Budget and Policy Priorities projected that nearly 10 million children would fall back into poverty without an expansion extension. It added that such payments were an important step in reducing "racial disparities in income."
"Extending the expanded credit and making the Child Tax Credit fully available on a permanent basis to families with low incomes would improve children’s lives in the near and long term and benefit society overall in important ways," the report stated.
If you are looking for ways to pay off outstanding debt and save money following the expanded CTC payment expiration, a personal loan might be an option to consider. Personal loan rates in 2022 are much lower than they were the year prior, and can be used to consolidate debt. Use an online marketplace like Credible to make sure you’re getting the best rate and lender for your needs.
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