Child Tax Credit Payments and Other Cash Benefits Lead to Decreased Child Poverty – North Carolina Justice Center

Researchers from the Center for Poverty and Social Policy at Columbia University measured monthly poverty rates throughout the COVID-19 pandemic. They use a supplemental poverty measure that includes all taxes and transfers, including income supports from federal COVID-19 relief, such as the stimulus payments and the enhanced tax credit payments for children (CTC).

These data show how effective cash assistance from tax credits and other pandemic relief has been in reducing child poverty, and the most recent data underscores the importance of improving outcomes. CTC payments. The American Rescue Plan Act made key, but temporary, changes to the CTC, increasing the amount of funds available to families, expanding eligibility for low-income families, and changing the timing of fund distribution. Families now receive half of the funds as monthly payments that started July 15, rather than as a lump sum when families file their taxes. Analysis from the Center on Poverty & Social Policy shows that the national child poverty rate fell from 15.8% in June 2021 to 11.9% in July after families started receiving CTC payments. The rate fell again to 11.5% in August as monthly CTC payments continued.

These monthly estimates provide a clearer picture of the real-time challenges facing families across the country. Poverty rates are most often an annual measure, but research shows that short spells of poverty can have long-term consequences for children’s well-being. These figures reinforce data that shows food insecurity has decreased among eligible families after the start of monthly CTC payments. These figures also add to the wealth of evidence that cash assistance is a crucial tool in the fight against poverty.


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