Child Tax Credit Research Articles

Boosting Take-Up of the Expanded Child Tax Credit through School-Based Outreach

Boosting Take-Up of the Expanded Child Tax Credit through School-Based Outreach

The Child Tax Credit—Tax Policy as Health Policy

This Viewpoint advocates for a more expansive child tax credit by exploring existing research on the credit and health outcomes.

The expanded Child Tax Credit and economic wellbeing of low-income families

The expanded Child Tax Credit and economic wellbeing of low-income families

Voter Support for Policies Associated With Child Health as National Campaign Priorities

Policies that are associated with child health are rarely included in platforms of candidates for national political office. Candidates may underrecognize voter support for such priorities or perceive that such policy issues are not sufficiently divisive to appeal to partisan voters. Key policy questions associated with child health may be considered by the next Congress, including the consistency of Medicaid coverage across states and restoring the recently lapsed refundable child tax credit. To examine voter support for candidates regarding policies that are associated with child health. This nationally representative survey of registered US voters 18 years or older was conducted from March to April 2024 and included a survey-based randomized experiment to evaluate the association of message framing with voter support. Messages conveying distinct rationales for Medicaid reform and refundable child tax credit. Likely or definite support for candidates. In this sample (unweighted N = 2014; 1015 women [51.0%]), most respondents indicated they would likely or definitely vote for candidates who expressed strong support for all tested policies: extreme risk protection order (79.5%), school threat assessment (73.1%), expanded childcare (69.6%), refundable child tax credit (66.6%), federalization of Medicaid (66.0%), paid parental leave (65.5%), free school meals (65.6%), safe firearm storage and enforcement (62.9%), preventing Medicaid disenrollment for children younger than 6 years (61.9%), universal free preschool (61.6%), and summer nutrition programs (57.9%). More women than men expressed support for all tested policies. Strong majorities of Democrat and Independent voters would support candidates who endorsed child-focused policies; fewer than 50% of Republican voters expressed such support, except for the extreme risk protection order and school threat assessment. Variations in framing language regarding consistent Medicaid coverage across states were not associated with amplified or diminished voter support. Framing the refundable child tax credit as benefiting "hard-working" vs "low-income" families garnered significantly more support among men (67.0% vs 59.0%), privately insured individuals (72.0% vs 64.4%), and Republicans (54.6% vs 43.0%; all P < .05). The study results suggest that most voters favor candidates who strongly support policies that are associated with child health. Voter support differs substantively by gender and political party affiliation and may be associated with language choices in messaging about policy change.

Expanded Child Tax Credit and Food Insecurity

This cohort study examines changes in food security associated with the 2021 Expanded Child Tax Credit enactment and expiration in 2 individual-level, longitudinal, nationally representative cohorts.

The expanded Child Tax Credit and low-income families’ food insecurity: Associations across and within months of receipt

In response to the pandemic-induced economic crisis for U.S. families, the federal government expanded the Child Tax Credit (CTC) via the distribution of monthly payments in the second half of 2021. Studies have found that these monthly payments corresponded with reductions in food insecurity, but what is not yet clear is whether these declines were stable across and within the months of receipt. Using novel, daily survey data among a sample of low-income families at high risk of food insecurity (N = 146), we tested whether the CTC payments were associated with stable rates of day-to-day food security. We found consistent declines in food insecurity across CTC months, though smaller declines for Supplemental Nutrition Assistance Program (SNAP) recipients who experienced lower food insecurity rates, on average. Within a CTC month, we found that food insecurity was stable for non-SNAP families for the first few weeks, but spiked in the week prior to the next payment. SNAP families’ within-month patterns of food insecurity, however, appeared to be tied more to their SNAP benefit timing than CTC payment timing. Both groups saw end-of-the-month spikes in food insecurity among those who received higher CTC amounts, suggesting the money may have been more difficult to stretch across families with a greater number of children. These results suggest that the effectiveness of cash payments like the CTC in reducing economic hardships may depend on family characteristics like receipt of other federal benefits and household size. Accordingly, future provisions of cash assistance may benefit from going beyond income alone and tailoring the amount to a family’s benefits package.

The Effects of the 2021 Child Tax Credit on Housing Affordability and the Living Arrangements of Families With Low Incomes

Access to safe and stable housing is important for child and adult well-being. Yet many low-income households face severe challenges in maintaining stable housing. In this article, we examine the impact of the 2021 temporary expansion to the Child Tax Credit (CTC) on housing affordability and the living arrangements of families with low incomes. We employ a parameterized difference-in-differences method and leverage national data from a sample of parents who are receiving or recently received Supplemental Nutrition Assistance Program benefits (N = ∼20,500), many of whom became newly eligible for the CTC. We find that the monthly CTC reduced parents’ past-due rent/mortgages (both amounts and incidence) and their reports of potential moves due to difficulties affording rent/mortgages. The CTC increased the likelihood that parents reported a change in their living arrangements and reduced their household size, both effects driven by fewer mothers living with a partner (and not a reduction in doubling up). We find some differences in effects by race and ethnicity and earnings. Our findings illustrate that the monthly credit improved low-income parents’ ability to afford housing, gain residential independence from partners, and reduce the number of people residing in their household.

Fostering Financial and Family Well-Being: A Qualitative Study on How Parents Utilized the Expanded Child Tax Credit

ABSTRACT This study examines the impact of the 2021 temporary expanded Child Tax Credit on families’ economic and social well-being. Using a qualitative research design we followed 18 families who received the Child Tax Credit, conducting multiple interviews for a total of 43 interviews. Economic benefits included reductions in hardships, enhanced financial management skills, the incorporation of child-related activities and enrichment and in some instances more future orientated economic behavior. We also found that the monthly benefits may have several advantages over the annual lump sum payment. Social and psychological benefits included a reduction in stress, stigma, and enhanced family well-being.

Effects of the expanded Child Tax Credit on employment outcomes

The temporary 2021 expansion of the Child Tax Credit (CTC) was intended to reduce child poverty during the COVID-19 pandemic. The expansion’s elimination of an existing phase-in with earnings, however, potentially disincentivized labor supply, raising concerns that it would reduce parent employment. We empirically test for employment effects using difference-in-differences analyses with Current Population Survey data. Across many specifications and multiple sub-groups, we find very small, inconsistently signed, statistically insignificant impacts of the 2021 CTC on parental labor force participation and employment.

The effect of the US Child Tax Credit advance payments in 2021 on adolescent mental health: Changes in depression symptoms and suicidality

ObjectiveChild poverty is associated with poor adolescent mental health. Changes to the Child Tax Credit (CTC) in 2021 in the U.S. were historic and introduced a new model of distributing the credit in advance of tax filing, providing families with stable, supplemental monthly income. This policy shift offers a unique opportunity to examine the mental health effects for adolescents. MethodsWe use electronic health record data from a large pediatric primary care network in Columbus, Ohio, which collected adolescent depression screening scores in real time as the CTC advance payments were introduced. We utilized differences in age of eligibility for the CTC to examine the changes in the probability of depression screening outcomes (positive depression screen, any depression symptom, any suicidal ideation), for adolescents eligible for the credit (turned 18 first quarter of 2022), relative to those not eligible (turned 18 last quarter of 2021) (n = 1,423). ResultsWe did not observe a significant association between the policy change and study outcomes in the overall sample. However, the percentage of adolescents with a positive depression screen significantly declined for Non-Hispanic Black (13.4 percentage point reduction, p = 0.01) and publicly insured (9.7 percentage point reduction, p = 0.04) adolescents. ConclusionsOur findings suggest reductions in depression symptoms for subgroups of adolescents who were age-eligible for the CTC compared to their counterparts who were not eligible. The CTC advance payments were a brief experiment in universal basic income and may offer a policy solution for addressing both poverty and a growing adolescent mental health crisis.

Perceived Impacts of the Expanded Child Tax Credit Cessation Based on Family Income Level.

The 2021 Expanded Child Tax Credit (ECTC) lifted millions of children out of poverty and drastically improved well-being. These impacts were particularly salient for families with lower income among those who received the full ECTC benefit. This study gathered lived experiences on the ECTC cessation and explored differential impacts across income levels to inform discussions around policy restoration. Semi-structured interviews were conducted with parents who had a child (2-12 years) who received the full ECTC. Interviews occurred in May 2022 after the ECTC ended. Changes in financial security and health were assessed. Families were classified as having lower vs. higher income (LI; n=19 vs. HI; n=19) corresponding to household income below vs. above 200% of the Federal Poverty Line. Inductive analysis and constant-comparison methods generated themes on similarities/differences between groups. Results indicated families with LI experienced severe financial constraints and greater negative emotions, after the ECTC ended. Many reduced spending, budgeted, accepted financial support from family/friends, and delayed credit card payments. More families with HI reported the ECTC provided a financial buffer placingthem in a more secure position to meet current needs. Both groups reported negative impacts from inflation coinciding with the ECTC ending and minimal changes in their income tax return. Families overwhelmingly reported a desire for the ECTC to continue, despite experiencing different degrees of impact due to these financial changes. Families with LI faced greater hardships after the ECTC ended. Differences across income highlight the need for ECTC restoration, particularly for families in severely under-resourced circumstances.

The Impacts of the Child Tax Credit on Financial Resilience and the Use of High-Cost Financial Resources: Evidence from a Panel Survey

The Impacts of the Child Tax Credit on Financial Resilience and the Use of High-Cost Financial Resources: Evidence from a Panel Survey

The Effects of the Child and Dependent Care Tax Credit (CDCTC) on Child-Care Use and Maternal Labor Supply

The Effects of the Child and Dependent Care Tax Credit (CDCTC) on Child-Care Use and Maternal Labor Supply

Assessing the Relative Progressivity of the Biden Administration's Federal Student Loan Forgiveness Proposal

Abstract We quantify the total stock of balances eligible for the Biden Administration's 2022 student loan forgiveness proposal and examine which groups would have benefited most. Up to $442 billion in loans were eligible. Those who would have benefited most were younger, had lower credit scores, and lived in lower- and middle-income neighborhoods. We also find that Black and Hispanic borrowers would have disproportionately benefited from the proposal. We then compare the distribution of beneficiaries for the proposed policy to several alternative hypothetical forgiveness proposals and three existing tax credits. The additional forgiveness for Pell Grant recipients increased the progressivity of the policy at a cost of $129 billion. Reducing the income eligibility criterion in half from the proposal would have reduced the cost by nearly $100 billion and made the policy more progressive. Compared with existing tax credits, the announced forgiveness policy is less progressive than the Earned Income Tax Credit but more progressive than the 2019 Child Tax Credit and higher education tax credits. We conclude with a discussion of how each policy lever affects the progressivity of loan cancellation to help inform future policy.

How Would a Permanent 2021 Child Tax Credit Expansion Affect Poverty and Employment?

How Would a Permanent 2021 Child Tax Credit Expansion Affect Poverty and Employment?

Sexual identity, poverty, and utilization of government services

Previous literature has established that lesbian, gay, and bisexual (LGB) people are at least as likely to be poor as heterosexual people, standing in contrast to myths of “gay affluence.” These findings have used datasets limited by either sample size or using partnership status to infer sexual orientation. Using U.S. data from the Household Pulse Survey, which allows us to identify large samples of individuals who self-identify as lesbian, gay, or bisexual, we find that bisexuals have lower incomes and are more likely to experience poverty, and bisexual individuals, gay men, and lesbian women are more likely to report financial hardship. Additionally, we find that LGB people utilize government assistance at higher rates than heterosexual people, even when allowing for selection into poverty status. We propose several explanations for these differentials, drawing on the program non-participation literature, and suggest that social network effects, lessened stigma, and increased reliance on public programs may explain these differences. Finally, we examine receipt of the enhanced child tax credit and find evidence that gay men and lesbian women with children were less likely to receive it than heterosexual men and women with children.

The effects of the expanded child tax credit on mental health of home renters and homeowners

The American Rescue Plan Act of 2021 expanded the Child Tax Credits (CTC) by increasing the maximum amount of credit, making the credit fully refundable, and providing advanced monthly credit payments from July to December 2021. We evaluated the impact of the expanded CTC in 2021 on mental health of home renters compared to homeowners within the income range eligible for maximum credit. The study included nationally representative data from the 2019–2022 Behavioral Risk Factor Surveillance System. Outcomes were the number of days not in good mental health in the past 30 days, and an indicator for having 14 or more such days. The study employed regression models examining mental health changes of adults before and after the CTC expansion by number of children (which determines the overall CTC payment). We find that the CTC expansion was associated with improved mental health among renters. A $100 monthly CTC payment was associated with 0.096 fewer days not in good mental health among renters in the past 30, with associations concentrated in the last quarter of 2021. There was little evidence of associations of CTC payments with mental health among homeowners. The findings suggest that cash support programs such as the CTC are associated with improved mental health of adults in low-income renting households.

Refundable Credits by Race/Hispanic Ethnicity, Income, and Filing Status

Using the US Department of the Treasury's tax model with an updated race and Hispanic ethnicity (RH) imputation, we find that Hispanic and Black families are not more likely than White families to benefit from the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC) within strata defined by income, RH, filing status, and the presence of children. Average EITC and CTC benefits are still generally higher for Hispanic families, but average CTC benefits are generally lower for Asian and Hispanic families who are married with children.

Expansion of Child Tax Credits and Mental Health of Parents With Low Income in 2021.

The 2021 Child Tax Credit (CTC) expansion, as part of the American Rescue Plan Act, offered financial relief through generous monthly tax benefits to families with children amid the COVID-19 pandemic. In light of heightened concerns about mental health during the pandemic, the expanded CTC may have alleviated parental mental health challenges, especially within families with low income. To investigate the association between the 2021 CTC expansion and mental health among parents with low income as measured by depression and anxiety symptoms. This repeated cross-sectional study used data from the Household Pulse Survey covering April 14, 2021, to January 10, 2022, in the US. A difference-in-difference-in-differences estimator combined with propensity score matching was used to estimate the association of the expanded CTC with mental health symptoms among households with income less than $35 000. The monthly payment of expanded CTC from July 15 to December 15, 2021. Parental mental health was measured by analyzing depression and anxiety symptoms using logistic regression. The weighted sample comprised 546 366 adults (mean [SD] age, 43.02 [14.54] years; 52.9% female). The most common education level was high school or less (36.0%), the highest frequency of household income distribution was $50 000 to $74 999 (16.1%), and the majority of the sample was employed (67.3%). The weighted mean (SD) number of children in the household was 0.92 (1.18). For the full sample, receiving expanded CTC benefits was associated with lower odds of experiencing anxiety symptoms (odds ratio, 0.730; 95% CI, 0.598-0.890). Subgroup analyses indicated that the positive associations of the policy with anxiety symptoms were particularly pronounced among the female, working-age (17-60 years), non-Hispanic White, and higher education groups. However, the policy expansion had no association with depression. These findings may provide valuable evidence for policy makers to consider when deliberating on the possibility of making the CTC expansion permanent or transforming it into a universal program.

Consumption responses to an unconditional child allowance in the United States

The COVID-19 pandemic put families in the United States under financial stress. The federal government’s largest response in 2021 was the American Rescue Plan Act, which temporarily expanded the Child Tax Credit (CTC) into a large, unconditional child allowance providing monthly payments to families with children. This study investigates consumption responses to the CTC expansion using anonymized mobile-location data and debit/credit card data that track visits and spending at 1.3 million establishments across US counties. For identification, we exploit variation in the size of households’ income gains due to the CTC across counties in a difference-in-differences framework spanning January 2021 to May 2022. Counties benefiting most from the CTC expansion experienced larger increases in visits to childcare centres and health- and personal-care establishments, and increased visits to and spending per transaction at grocery and general stores. These findings suggest that the CTC expansion increased household consumption and spending on children.