Child poverty rises after child tax credit payments end

The child poverty rate in the United States has risen since the end of monthly government checks for the Expanded Child Tax Credit in December, according to a recent study by researchers at Columbia University.

According to their analysis, an additional 3.7 million children fell into poverty in January. That pushed the national child poverty rate to 17% last month, from 12.1% in December — the highest poverty rate for children in the United States since the end of 2020, the researchers noted. A total of 12.6 million children lived below the poverty line last month, up from 8.9 million in December, according to the study.

Anti-poverty experts had warned that the end of monthly payments could impact millions of children. The enhanced CTC, which expired on December 31 when the Build Back Better Act stalled in Congress, had provided a monthly payment of up to $300 per child — money that families say helped pay for essentials like rent, food and gas.

“It’s been a fight”

A mother told CBS MoneyWatch that the end of her family’s $500 monthly CTC payments forced her to cut back on basic expenses.

“It’s been a struggle – we have less food on the table,” said Meighen Lovelace, a mother in her 40s who lives in Avon, Colorado, with her two daughters, ages 10 and 14. “I also couldn’t get all of my daughter’s medications. Some aren’t covered by insurance, so we couldn’t buy them.

She added: ‘And we turn our heating down quite low and sleep in our sweaters to keep the heating bill down.’

Lovelace said the disability of one of her daughters means she spends much of her time providing care, which limits her ability to work. CTC checks allowed them to pay for essentials like gasoline, medicine and rent, but the family’s financial situation has been precarious since the checks ended, she said.

“It’s not just the financial part — it’s the feeling of security and ease” of knowing when the monthly checks would arrive, Lovelace said. “When we can’t budget for that, there’s a feeling of increased stress knowing we have to find a way to pay for our basic needs.”

CTC and tax refund

The expanded tax program provided a credit of $3,600 for children under age 6 and $3,000 for each child between the ages of 6 and 17. Half of the credit was paid in monthly installments between July and December 2021 – $300 per month for younger children and $250 per month for older ones. children – parents claiming the other half on their tax returns.

With tax season open until April 18, it’s likely that most families will receive this second half of the CTC through their tax refunds. That might provide some financial relief, but the support won’t last: In 2022, the CTC returns to its previous level, which provides $2,000 per eligible child. Full payments also only go to families who have earned enough to owe taxes, meaning the country’s poorest families are unlikely to qualify.

Tax refunds could provide temporary relief to millions of families, but child poverty rates are expected to remain high, Columbia researchers predicted.

Families face budget constraints as monthly child tax credit checks stop


“After tax season ends, however, it is likely that monthly child poverty rates could remain elevated through the remainder of 2022 absent the continuation of an expanded child tax credit, new policy interventions or strong improvements in labor market outcomes,” they wrote.

Black and Latino children were more affected than white children when CTC payments ended, the researchers found. The poverty rate for Latino children increased by 7.1 percentage points between December 2021 and January of this year, and black children saw an increase of 5.9 percentage points, they found; White children saw a 3.9 percentage point increase in poverty.