Child poverty rose by 3.7 million after expanded child tax credit expired: study

Almost 4 million American children fell into poverty last month after the expanded child tax credit (CTC) expired, according to a study released Thursday by the Center on Poverty and Social Policy at Columbia University.

The lapse of monthly CTC payments in January pushed 3.7 million children below the poverty line, according to federal data analyzed by the Columbia researchers. The child poverty rate rose from 12.1 percent in December to 17 percent in January — an increase of 41 percent.

“While in place, the monthly child tax credit payments buffered family finances amidst the continuing pandemic, increased families’ abilities to meet their basic needs, reduced child poverty and food insufficiency, and had no discernable negative effects on parental employment,” the authors of the study wrote.

The $1.9 trillion stimulus bill signed by President Biden in March 2021 increased the amount of money parents receive through the CTC to $250 per child between ages 6 and 17 and $300 for each child younger than 6. The bill also removed work requirements for the CTC and allowed parents to collect half of their total annual credit through a series of monthly payments, instead of a one-off tax reduction, from July to December 2021.

More than 36 million households covering 61 million children received expanded CTC payments from July through December last year. While Biden and Democrats tried to extend the expanded CTC, it lapsed after Sen. Joe Manchin (D-W.Va.) slammed the brakes on the president’s Build Back Better social services and climate plan.

Manchin said last month he would be open to renewing the expanded CTC with lower income limits and reimposed work requirements — two major issues for many other Democratic lawmakers. The senator has also expressed concerns about Congress stoking inflation even higher through more stimulus, but his progressive critics argue the expanded CTC is essential to helping struggling families handle higher prices.