Implementing the Expanded Child Tax Credit: What Worked, What Didn’t, and How to Move Forward

Abstract

The Child Tax Credit (CTC) expansion was an extraordinary experiment not just in policy design but also in policy implementation. As such, it cast light on the possibilities and blind spots of using the tax system to deliver safety-net benefits. The rapid and widespread take-up of the benefit reflected the use of a specific implementation tool that reduced administrative burden for the public: auto-enrollment via the tax system. But use of this tool also excluded families who could benefit from the program but were disconnected from the tax system. These tended to be families with the lowest incomes. Thus, while the CTC expansion offered a classic example of “targeting within universalism” by broadening a policy’s beneficiaries while making it more redistributive, its implementation revealed that a different sort of targeting is needed to reach those with the lowest incomes and to achieve the hoped-for redistributive impact.