Fighting for What Works: Lessons from the Expanded Child Tax Credit

Earlier this month marked a milestone anniversary in the history of American anti-poverty programs: two years ago, on July 15, 2021, the first monthly payments of the expanded Child Tax Credit went out to millions of households. 

This expansion has deep roots in the welfare rights movement, including the powerful organizing of poor mothers and caregivers who insisted that poor and low-income people did not need to prove their worthiness to receive government assistance. Although it took decades for this vision to be enacted, when the expanded Child Tax Credit was finally implemented, its effects were noticeable immediately. 

For the first time, the poorest households in the country received the credit, regardless of household income. Millions of children were lifted above the poverty line and racial inequities among poor children began to narrow. New research from Economic Security Project Action shows that the monthly payments served as a buffer against inflation, providing enough support for many families to cover rising costs, without increasing inflationary pressures, while generating nearly $20 billion of economic activity every month. 

Despite these successes, lawmakers allowed the program to lapse at the end of 2021. Within weeks, millions of children fell below the poverty line. 

Two years later, poverty and economic insecurity are still on the rise, as other pandemic support programs – including expanded benefits and eligibility for unemployment insurance, Earned Income Tax Credit, SNAP, economic stimulus checks, eviction protections and easier access to Medicaid – have also come to an end. Food and housing insecurity rates are climbing, millions of people are preparing to lose their health care and child poverty rates are back up to pre-pandemic levels. 

Indeed, over 18 million children – among them 6.6 million Latino children, 6 million white children, 4.2 million Black children, 576,000 Alaskan Native or Indigenous children, 498,00 Asian children, 1 million children in veteran or active duty families and one-third of children in rural counties, or 3 million children – no longer qualify to receive the full credit. 

Given these worsening conditions, it is no surprise why the expanded credit remains popular across party lines. In fact, both Democrat and Republican parents polled in 2023 preferred a child credit that did not have any work or income requirements by a margin of 2 to 1.   

Earlier this year, I participated in a roundtable discussion on the expanded Child Tax Credit at the Society for Research in Child Development’s annual conference. Alongside the research team from Children’s HealthWatch and Revolutionary Healing, we shared key findings from our joint report, “I Didn’t Have to Worry,” with researchers from the University of Pennsylvania, Syracuse University, New York University and the Minnesota Department of Human Services. 

We were all acutely aware of the crises facing poor and low-income people, and looking for lessons to carry forward from the expanded program. As Dr. Stephanie Ettinger de Cuba, executive director of Children’s HealthWatch, said, “We have to track what happens in this period, not only in the short-term when these programs work, but also when they are cut back. And we need policies that work the hardest to reach the most marginalized people, across generations. When we do that, we make policy better for everyone – and everyone does better.”

“The expanded Child Tax Credit was effective because it came out of a lineage connected to poor and dispossessed people, organizing for our right to fare well.”

Moreover, as the Kairos Center has learned from the welfare rights movement and decades of poor-led organizing, the best policies are anchored in the lives and realities of those most in need of them, those who are intimately aware of what is necessary to end our suffering and make ourselves whole once again. Although it was ended prematurely, the expanded Child Tax Credit was effective because it came out of a lineage connected to poor and dispossessed people, organizing for our right to fare well. 

Read the full discussion, below. 


Shailly Gupta Barnes (SGB): Thank you for joining us for this discussion about the Child Tax Credit and the impact of cash transfers. Stephanie, could you start us off by telling us about the impacts of poverty and economic hardship on individuals and households and how this changed during the pandemic? 

Dr. Stephanie Ettinger de Cuba (SEdC): Poverty is what we call a toxic stress. And, without interventions, it has long term implications for brain development for child health, healthcare utilization and a million other things. Not being able to buy toys or books or not having sufficient diapers, food, housing or childcare all has an impact on children’s development. There is also a lot of research demonstrating how parent well-being has a measurable impact on their children’s well-being, both their development and their health.   

During the pandemic, poverty exacerbated other inequities that were pre-existing before the pandemic, and widened those gulfs even further. You can see these differences, especially when you account for race and ethnicity and different household structures, and when you look at households with very young children. There has actually been a big increase in their material hardship. 

SGB: Allison, how did Children’s HealthWatch respond to these conditions? How did you develop the research infrastructure and framework for this study on the impacts of the Child Tax Credit? 

Allison Bovell-Ammon (ABA): Before the pandemic, Children’s HealthWatch already had an existing cross-sectional survey in place where we were interviewing families in healthcare settings across five cities, meeting them in either emergency rooms or primary care clinics. 

In the early weeks of the pandemic, we were very concerned that there wasn’t any concerted effort focusing on what was happening with these youngest children. So we scrambled to build a new longitudinal study to follow up with families that we had talked to pre-pandemic and see how they were doing. We wanted to measure the hardships these families were experiencing during this time, while knowing that all these policies were changing rapidly. This meant figuring out whether or not people were actually receiving these cash transfers and benefitting from these policies and then determining what impact they were having. 

We did one wave of the survey starting in September 2020. By the time we got to the second wave in 2021, the Child Tax Credit had been expanded, so we added questions to our survey about the Child Tax Credit.  

We knew that the quantitative data wasn’t going to tell us the whole story, so we designed a mixed method study that the Kairos Center and Revolutionary Healing joined us on, to specifically focus on the family’s perspectives and experiences. 

SGB: Diana, you were the lead on the qualitative research during this second phase. What were the challenges that these families expressed that they experienced during the pandemic? 

Dr. Diana Burnett (DB): There were several challenges raised, that can be broadly organized around five themes: 

  1. Chronic uncertainty and instability. This looked like anxiety and fear around the ability to maintain basic needs like food, housing, and other necessities of life. The pandemic was kind of like the “Hunger Games,” where families didn’t know how they could get what they needed. 
  2. Long-term and compounded suffering. As Stephanie already laid out, material conditions for poor households were exacerbated by the pandemic. If you had a pre-pandemic situation that made      your homelife difficult, whether it was rodents, pests, abusive persons in the home, all of that was made worse. If you had low-quality foods in your neighborhood or transportation difficulties, that was made worse.  The banality of suffering and pain of these conditions, which did not begin during the pandemic, were all compounded on top of each other, all happening at one time, but alongside more death and trauma.      
  3. Health impacts. There were direct and enduring impacts to both physical and mental health, which were intensified for both parents and children.  Parents talked about their own experiences of anxiety, depression, postpartum depression, panic attacks, agoraphobia, as well as headaches, weight gain and unexplained illness. Some of this was also showing up with their children, but because of the pandemic, their own health concerns were being deprioritized. Conditions that they pushed off for years were rushed through the treatment process. There were long wait times when they did receive health care. 
  4. Disenfranchisement. The main discussion here was the governmental failure to support families, especially around information about public resources. Households had to find things out by word of mouth. There was an everyday awareness of disenfranchisement, in terms of not having basic needs met, like the basic needs to have space, food, housing, or some regularity in their lives, which was stark given the public discussion about the incredible wealth gains that were also made by higher-income households and corporations. 
  5. The complexity of grief.  Not only was there an absence of a space to grieve, but that grief was complicated by range of things – the loss of life, loss of dreams and hopes, loss of freedom and movement, loss of employment, resources, services and support, the absence of child care and the complex trauma of being in one’s home through all of this disruption, managing virtual homeschooling children, physical health issues and trying to survive. 

SGB: As we move into the impact of the expanded Child Tax Credit in this context, Allison, about the policy environment of the pandemic?  

ABA: Yes, in the early months of the pandemic, federal and state governments were keenly aware that they were facing a massive crisis. The federal government very rapidly pumped trillions of dollars into the health care system, developing vaccines and otherwise stabilizing the economy. There was also an effort to ensure that there wasn’t widespread hunger and that people weren’t being evicted from their homes. However, all of these infusions of dollars were temporary, some of which were tied to the public health emergency and some of which were tied to arbitrary dates that came and went.  

The Child Tax Credit was one of these programs. Although this had been in existence since the 1990s, it was expanded as part of the American Rescue Plan in 2021. There were three major changes made to the CTC:

  1. The structure of the credit was changed to expand eligibility and include families who had $0 of earnings. Previously, as a tax credit, it had only been partially available to families who did not pay taxes. Millions of families were left out, in particular, the poorest families in the country. With this one change, over 90% of children were eligible for the expanded version of the credit. 
  2. Before the expansion, the maximum amount of the CTC was $2,000. In 2021, it was expanded to be $3,000 for children ages six to 17 and to $3,600 for children zero to six years of age. 
  3. The CTC was also made available through monthly payments from July to December 2021. Those monthly payments were basically an advance on the tax return. 

“This was a huge national experiment: 60 million children received Child Tax Credit payments, in 35 million families across the country. It was, by far, the largest expansion of a tax credit we’ve ever seen in the country and, especially for poor and low-income families, the results were profound.”

SEdC: Another important feature of the Child Tax Credit is that it is written into the IRS code that it does not count against other benefits you might receive. People could continue to receive food stamps, WIC, other public benefits as well as the CTC. 

This was a huge national experiment: 60 million children received Child Tax Credit payments, in 35 million families across the country. It was, by far, the largest expansion of a tax credit we’ve ever seen in the country and, especially for poor and low-income families, the results were profound. 

SGB: Stephanie, what was the impact of these payments? 

SEdC: About 74% of the 544 families we talked with during both phases of the survey received the expanded Child Tax Credit. Those who were least likely to receive the CTC were Latino and immigrant families. In fact, we saw that our immigrant families were 42% less likely to get the CTC than a US born family.  

Of those families who did receive the credit, we found that families who had reported being behind on rent pre-pandemic were 2.66 times more likely to have been able to catch up on rent if they got the CTC. While this is a very dramatic impact, it was really concentrated among our US born families. 

The other key finding was that the parents themselves were 32% less likely to report being in very poor health. In other words, they were more likely to report being in good health. There is an intergenerational connection along health: although we didn’t find a significant finding for the children themselves in our data, we know that when parents are faring better, it bodes well for their kids. 

ABA: When we looked at the impact of the economic stimulus payments, we saw similar findings – similar disparities in receipt, similar associations with reduced food insecurity. But the stimulus payments came in a lump sum, so spending was different. These checks were actually spent really quickly. 

This wasn’t the case with the CTC monthly payments. Their recurring nature had more robust impacts, because people could plan on them and budget for them. 

Silvana Freire (SF): One thing we also found in our cash transfer study, Babies’ First Years, was that families receiving this cash assistance were investing more on purchasing things for their children, like toys and clothing. In the group that was receiving the high cash transfers, compared to the ones that were receiving the lower amount, mothers also reported that they were spending more time with their children. 

SEdC: Yes, there is food expenditure research on the monthly Child Tax Credit payments that is very similar. People were using it for basic needs and this changed over time, as those needs changed: in August, there were more payments on school supplies and educational expenses; in the winter months, more was spent on coats and winter supplies. People know what to do with their money and support their children in the best way possible.      

SF: There is a common myth that low-income families and poor families will use cash assistance for alcohol, and drugs, and this is not at all what we found. And in our research, there were no financial services provided to families. They just received the money.

SGB: Diana, can you tell us how families’ experienced the impact of the Child Tax Credit? 

DB: Again, there were a range of experiences, but I’ll lay out a few major themes: 

  1. A feeling of hope. There was hopefulness around the ability to have some stability during a time of incredible instability, to believe that they might have enough to provide for their children’s needs in some way. 
  2. A feeling of temporary relief and support. There was momentary relief from the everyday burdens that families were facing. They had the ability to catch up and make sure their children had what they needed. This was really important. 
  3. The ability to create a small reserve or savings for times of need. The extra resources allowed parents to have school clothes, shoes, supplies, masks and sanitation products,  secure alternative transportation if they needed it and then have some money on hand for emergencies in this difficult situation. 
  4. Uncertainty. Conversely, there was a lot of uncertainty around whether these benefits would last. Will Congress pass something to keep the CTC in place? Will they not? When will it come back? Will it come back? Some of the participants also talked about receiving some of the payments, having a lapse in receipt and then having to go through some kind of inquiry with the IRS. This was all part of this theme of uncertainty. 
  5. Fear. This mainly comes up around having to interact with the IRS. Many families expressed a fear of retaliation, retribution and even imprisonment: one erroneous filing could have devastating consequences, loss of benefits or otherwise endanger their family’s ability to be fed or housed, or even having their children taken away from them. This fear was heightened among those with uncertain immigration status and those who did not have any other support for their children. 

SGB: Allison, could you tell us more about the policy design of the Child Tax Credit and, in particular, these gaps that we’ve been hearing about? 

ABA: From a policy lens, this disarray, and the exclusions that were both written into the policy and the de facto exclusions, all exacerbated inequities in receipt. And this did not actually begin with the pandemic. 

Before 2017, all children who met the income requirement of the Child Tax Credit were able to receive it. They did not need social security numbers. However, in 2017, tax legislation that was passed along party lines by Republicans, and enacted by President Trump, rolled back eligibility for immigrant children who did not have social security numbers. With this change, about 1 million children became ineligible for the credit.     

There were also de facto exclusions and inequities in receipt of the credit. We’ve talked about tax filings a little bit and I want to note something on this: single filers who make less than $12,400, and married filers who make less than $24,000, are not required to file taxes. This usually means these households don’t file taxes. We call them “non-filers.” Some estimates suggest that there were 4 million children who fell into this bucket of  non-filing families. When the Child Tax Credit was expanded, people who had zero income from work were eligible for the credit; however, because they had not been required to file taxes before, and likely had not been filing taxes, they did not have a tax history that could facilitate the receipt of the monthly Child Tax Credit.      

Also, mixed status families – where one member is a US citizen who has an “eligible immigration” status, with a social security number, and maybe their parents do not – had to go through an extra step to receive the monthly payments: the parents had to apply for an individual tax ID number, or ITIN, for their eligible children to receive the credit. However, there is a massive ITIN application backlog at the IRS, so although they were technically eligible on paper, they just did not receive the payments. 

“…[T]he expansion of the Child Tax Credit was a temporary commitment, even though poverty has long-term impacts on families and children. How are policies designed to have a long-term impact versus a quick fix for an immediate crisis?”

DB: A number of these barriers came up in the interviews with families. In addition to the filer status, they raised concerns around digital literacy, financial literacy and how information about the Child Tax Credit was being circulated. There was also a concern around surveillance, especially through having to establish a relationship with the IRS. This was a big issue for some families. 

There were also comments about national priorities more generally. Whereas there was this unending supply of resources directed to the military, families expressed that they had to wait for tax season or spread out their small payments across a number of months. Families specifically mentioned the disparity between all the funding for the war in Ukraine, while they were being pushed further into debt and being spread thinner and thinner. 

They also raised how the expansion of the Child Tax Credit was a temporary commitment, even though poverty has long-term impacts on families and children. How are policies designed to have a long-term impact versus a quick fix for an immediate crisis? 

Finally, participants talked about the nature and the structure of families and the policy design. Is the Child Tax Credit built on a particular family structure, or marriage and partnerships, and what does it mean when families are not structured in that way?

SGB: This last point raises many questions. Social welfare programs have long been designed around a certain conception of the family, often with a certain emphasis on marriage or primary wage earners (and what they are earning), that does not necessarily correlate with the lived experience or realities of participants in these programs. 

It also infuriates me that, despite the barriers and limits of the expanded Child Tax Credit, for those who received it, its benefits were so clear. Yet, that wasn’t enough to keep it going. 

ABA: Yes, it’s so important to remember that this experiment did work. And, for those families who could access the monthly payments, the changes made to this policy were very effective. 

What this means is, we don’t need to accept – and we shouldn’t accept – limitations on this policy moving forward. As I said, up until 2017, undocumented kids were eligible for the Child Tax Credit. That can be changed again. And in the absence of federal action, there are also opportunities at the state level around cash assistance for undocumented populations. Up until about a decade ago, Massachusetts had its own cash assistance and SNAP program for undocumented people who were left out of federal programs and we’re trying to get that back.

SEdC: If nothing else, the advanced child tax credit showed that we know how to fix child poverty. And if we didn’t have the data before, we have it now. 

If we could create a more inclusive, more equitable version of what we had, there are big implications for long-term child development trajectories and on intergenerational health. Instead, our government let this program lapse and several indicators on health and well-being are deteriorating. 

As we face the official end of the public health emergency and rollbacks on continuous eligibility for Medicaid as well as cuts to SNAP benefits, we have to track what happens in this period, not only in the short-term when these programs work, but also when they are cut back. We need policies that work the hardest to reach the most marginalized people, across generations. When we do that, we make policy better for everyone – and everyone does better. 

ABA: Yes, frankly, we’re going to be playing a lot of defense on these policies at a federal level. The majority on the House side is taking serious aim at the lower-income families and immigrant families, around public benefit participation. Although the corporate benefits from the 2017 tax law were made permanent, the individual tax provisions expire in 2025. So, there will be a conversation next year about individual taxes, as well as the Child Tax Credit, and the Earned Income Tax Credit, both of which benefit poor and low-income people. People who are most marginalized cannot be left out of the conversation. 

And then at least 29 states have legislation to create their own CTC. In some states, this is a bi-partisan issue. In Utah, the state legislature just passed a state level Child Tax Credit. It’s not by any means the policy I would have designed – it doesn’t reach the families with the lowest incomes – but it is a recognition that childhood is an important period of time that we, as a society, must be supporting.  And, yet, there is a danger in making that allow policymakers to check a box and say they “got something done” while continuing to marginalize and worsen economic and racial inequities. 

SGB: Yes, we have to fight for what we need and what is possible, which we know actually works, and fill the gaps where it doesn’t.  

(Photo Credit: Shanaz Deen)