Policy Wonk

Expanded Child Tax Credit: United States

Headline result
5.1%
child poverty rate in 2021 (Supplemental Poverty Measure), a record low
Observational
Implemented by
US Congress and the Internal Revenue Service
Type
National government
Where
United States
Region
North America
When
2021
Evidence
Observational / administrative data

The challenge

Millions of American children were living in poverty.

The case

The 2021 American Rescue Plan Act raised the Child Tax Credit for that year from $2,000 per child to $3,600 for each child under 6 and $3,000 for each child aged 6 through 17, and made it fully refundable. The IRS paid half of it in monthly payments during the second half of 2021, starting on 15 July. Child poverty under the Census Bureau's Supplemental Poverty Measure, which counts tax credits and benefits, fell to a record low in 2021. Using corrected 2026 figures, it fell from 9.6% in 2020 to 5.1% in 2021, then rose to 12.0% in 2022 after the expansion and other pandemic measures expired.

Why it worked

Getting cash to families with children, including those with the lowest incomes, cut child poverty to its lowest recorded level within a year. When the expansion lapsed, child poverty more than doubled, which the Census Bureau attributed to the expiry of the expanded tax credits and the end of stimulus payments.

Sources