Washington, DC area residents Kara Baldari and her 9-month-old daughters Avi (left) and Sarah Orrin-Vipond and their 8-month-old son Otto (right), attend a rally in front of the US Capitol on Dec. 13, 2021.
Alex Wong | Getty Images
According to racial justice organizations, rolling back the increased child tax credit along with monthly checks will help lift millions of children out of poverty at a time when their families are battling inflation and economic uncertainty with increased prices.
That’s why a group of more than 40 such groups, including UNIDOS, the NAACP, the Economic Security Project, the National Urban League, Community Change Action and The Leadership Conference, sent a Letter In May, Senate Majority Leader Chuck Schumer, D.N.Y. Advocating for restoration of enhanced tax credit to
In the letter, the groups noted that ending in December, the increased debt cessation had an impact on households, and especially families of color.
“The impact of the end of monthly CTC payments has been particularly profound—and painful—for communities of color,” the letter said.
The child tax credit was extended as part of President Joe Biden’s US rescue plan signed into law in March 2021. For the last six months of 2021, families with eligible children received monthly payments of up to $300 per child through the credit. The second part of the credit was given to families this year in the form of tax refunds.
The benefits of increased credit were widespread, reducing child poverty, food insecurity And financial concern For millions of families with children. Those results were most prominent for black and Latino children.
Making the credit fully refundable — meaning families with no or very little earned income can still receive its full value — extended benefits to 27 million children, according to data from the Center on Budget and Policy Priorities. This included half of black and Latino children previously unable to qualify for credits or receiving only partial benefits.
“It really helped very low-income families,” said Brian Rodriguez, a senior policy analyst at Unidos.
When the credit increase ended at the end of 2021, the benefits from monthly checks to households were swiftly reversed. The Center on Budget and Policy Priorities found that millions of children fell back into poverty, and food insecurity and financial instability ticked back. Now in the midst of the highest inflation in nearly 40 years, Nearly half of low-income households Struggling to buy enough food without credit.
“While the poverty rate among white children will also increase, it will still remain about two-thirds lower than that of black and Latino children,” the letter from racial justice organizations said. “It’s simply unacceptable.”
Those children who grew up in poverty also have negative consequences later in life.
Rodriguez said, “The impact of poverty is really damaging to the children who lived through it and we have an opportunity to make it so that the children who at least get this credit do not face those consequences. “
To be sure, the regular Child Tax Credit is still available for families with eligible children. Instead of receiving a larger amount from the upgraded monthly payment and increased benefits, families can claim the basic credit, up to a maximum of $2,000, when they file their 2022 tax return the following year.
The increased child tax credit was included in the Democrats’ Build Back Better Plan, a nearly $1.75 trillion economic bill that failed to pass the Senate. Now, as Democrats attempt to rework the proposal, the increased child tax credit hangs in the balance – one of the initiatives President Biden was ready to walk away from the law in an attempt to pass it.
There is also another proposal that could bring back equal monthly payments to families with children. Senator Mitt Romney, R-Utah, resumed a plan this week That would send some families with children up to $350 per month per child. However, Romney’s plan will include a work requirement: Families must earn at least $10,000 during the year to receive full benefits.
There are two parts to the increased benefits advocates want to continue. The first is a full refund of credit, which allowed it to reach more children than ever before.
Adam Reuben, director of the Economic Security Project, said, “It is the children who were struggling the most in the past and for whom the CTC made the most difference, and who were really left in the lurch after the termination.”
The second element advocates want to protect Monthly payments, which helped the families meet their day-to-day expenses, he said.
Extending increased credit to 2025 will significantly reduce child poverty and free more than 4 million children from living in poverty, According to Urban Institute,
“Poverty is a policy choice,” the organizations wrote in the letter. “Also a political choice is to let millions of children, including more than 2.5 million black and Latino children, fall back into poverty.”
Sign up: Money 101 is an 8-week learning course for financial freedom, delivered weekly to your inbox, for spanish version Dinero 101, Click Here,
Disclosure: NBCUniversal and Comcast Ventures are investors chestnut,