From 2021-2023, child poverty has more than doubled from 5.2 to 13.7 percent. The latest Census data make clear that lawmakers have the tools to help millions of children and their families – and it’s beyond time they take action.
Refundable Tax Credits
Refundable credits like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) boost the economic security of working families. ITEP examines how such tax credits affect working people’s incomes and how this would change under proposals to modify the credits or create new ones.
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blog September 10, 2024 Expanded Child Tax Credit is Key to Reducing Child Poverty, New Census Data Illustrate
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blog August 16, 2024 Here’s a Tip: Keep the Taxation of Tips As-Is
The no tax on tips idea isn’t a new one, but it’s always been abandoned because it’s practically impossible to do without creating new avenues for tax avoidance. Despite its embrace by the candidates from both major parties, this policy idea would do little to help the roughly 4 million people who work in tipped occupations while creating a host of problems.
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report July 17, 2024 Improving Refundable Tax Credits by Making Them Immigrant-Inclusive
Undocumented immigrants who work and pay taxes but don’t have a valid Social Security number for either themselves or their children are excluded from federal EITC and CTC benefits. Fortunately, several states have stepped in to ensure undocumented immigrants are not left behind by the gaps in the federal EITC and CTC. State lawmakers should continue to ensure that immigrants who are otherwise eligible for these tax credits receive them.
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blog March 26, 2024 Our Taxes Can Set Kids Up for Success
Every child deserves the opportunity to succeed in society – and tax policy has a huge role to play in making that happen. Better tax policy can help prepare our young children with skills to become successful and thriving adults.
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brief February 2, 2024 Impacts of the Tax Relief for American Families and Workers Act
The Tax Relief for American Families and Workers Act passed by the House of Representatives on January 31 is a compromise between lawmakers who want to address child poverty and… -
brief January 16, 2024 Proposed Tax Deal Would Help Millions of Kids with Child Tax Credit Expansion While Extending Damaging Corporate Tax Breaks
On January 16, Congressional tax writers officially announced the details of a tax policy agreement. The deal includes expansions of the Child Tax Credit (CTC) to improve access for low-… -
blog September 12, 2023 Lapse of Expanded Child Tax Credit Led to Unprecedented Rise in Child Poverty
The new Census data should provide both concern and optimism for lawmakers. The steep rise in child poverty is an inexcusable tragedy. But it shows that child poverty is avoidable when Congress makes the decision to make tax policy for those who need the hand up rather than for the rich and powerful.
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report August 29, 2023 Expanding the Child Tax Credit Would Advance Racial Equity in the Tax Code
Expanding the federal Child Tax Credit to 2021 levels would help nearly 60 million children next year. It would help the lowest-income children the most and would particularly help children and families of color.
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brief June 13, 2023 Expanding the Child Tax Credit Would Help Nearly 60 Million Kids, Especially Those in Families with Low Incomes
Restoring the federal Child Tax Credit to 2021 levels would benefit nearly 60 million children. Three-quarters of the benefit would go to families in the bottom three quintiles, consisting of households with less than $86,600 in income.
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blog April 18, 2023 Why is My Refund So Much Smaller This Year? Only the Good (Tax Credits) Die Young.
This year millions of American families are finding that their refunds are much smaller than last year—or that they even owe taxes back to the government—because of the expiration of the expanded Child Tax Credit and Earned Income Tax Credit that were in effect in 2021. The lapse of the expanded credits affects a majority of the middle class, but lower-income households are particularly likely to feel the sting.
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report March 16, 2023 Effects of President Biden’s Proposal to Expand the Child Tax Credit
In his latest budget proposal, President Biden proposes enhancing the Child Tax Credit (CTC) based on the temporary credit that was in effect for 2021 as part of the American Rescue Plan Act. In this report we analyze how that proposal would help children and families.
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blog December 20, 2022 The Tax Deal That Wasn’t: Congress Decides Corporate Tax Cuts Are Too Expensive if it Means Also Helping Children
Congressional leaders announced their long-awaited omnibus spending package which will fund the government through September 2023. The good news: the bill does not include needless corporate tax giveaways. The bad news: it also leaves out any expansion of the child tax credit.
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blog November 21, 2022 Child Tax Credit Expansion Would Shrink the Racial Wealth Gap
Extending the expanded Child Tax Credit would benefit nearly every child in low- and middle-income families. Under current rules, 24% of white children, 45% of Black children, and 42% of Hispanic children will not receive the full credit in 2023 because their families make too little. These figures would drop to zero if the provisions were extended, helping families of all races and disproportionately helping families of color.
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blog November 3, 2022 Key Republicans Say Negligible Decline in Economic Growth Outweighs Enormous Drop in Child Poverty
The expanded Child Tax Credit reduced child poverty dramatically and immediately. There is no debate or murkiness on this. Some lawmakers have decided that cutting child poverty in half is not worth the cost if it means an ambiguous and negligible decline in GDP growth. This view is not just cruel, it is bad economics.
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blog October 3, 2022 Congress Should Not Leave Children Out of Possible Year-End Tax Deal
If lawmakers believe it’s worthwhile to extend corporate tax breaks, then it would be entirely unreasonable for them to not conclude the same about tax provisions that help low-income children.
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blog September 14, 2022 Census Data Shows Need to Make 2021 Child Tax Credit Expansion Permanent
The Child Tax Credit expansion led to a 46 percent decline in childhood poverty. That it could be accomplished during the largest economic disruption in most of our lifetimes underscores a basic fact: thoughtful, decisive government action to combat poverty works.
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blog September 7, 2022 Romney Child Tax Credit Plan Would Leave Millions of Children Worse Off and Raise Taxes for the Average Black Family
Sen. Romney’s plan would expand the Child Tax Credit and offset the costs by scaling back other tax benefits. All told, it would raise taxes on a fourth of all kids in the U.S. This includes about a fourth of the children among the poorest fifth of U.S. families.
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blog April 18, 2022 Public Problems Demand Public Solutions
Long-term troubles for this country and this planet now demand our attention. Progressive tax policy would transform our ability to tackle them.
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blog March 24, 2022 Women’s History Month is a Reminder that Sensible Tax Policy is Central to Women’s Economic Security
Women’s History Month is a chance to remember what happens for women when tax policy becomes more progressive, boosts income, and helps make raising a family more affordable.
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blog March 11, 2022 What We Can Learn Today from the American Rescue Plan – and Sen. Rick Scott’s Proposed Tax Increases
The success of the American Rescue Plan Act is worth revisiting today. Instead of pursuing Sen. Rick Scott’s agenda of making life more difficult for those already working the hardest, Congress should extend or make permanent some of the beneficial policies in ARPA.
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blog March 1, 2022 Taxes Should be Part of the State of the Union Agenda
President Biden should elevate his tax and revenue proposals which remain essential if we are to pay for environmental restoration, health priorities and peacekeeping, the front-burner items that may dominate the speech.
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blog January 14, 2022 The Compelling Data and Moral Case for Continuing the Child Tax Credit Expansion
In just six short months, the enhanced Child Tax Credit (CTC), enacted as part of the American Rescue Plan (ARP), decreased the number of children living in poverty by 40 percent. ITEP estimated that the lowest-income 20 percent of households with children would receive a 35 percent income boost from this policy alone in 2021. This is a meaningful, life-changing sum.
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blog January 13, 2022 The Problem with Returning to a $2,000 Non-Refundable Child Tax Credit
Prior to last year, more than one in three children lived in households with incomes too low to receive the full $2,000 credit because it is not fully refundable. This means earnings requirements and other limits reduce the amount tax filers can receive as a refund. In fact, the maximum refundable portion is reduced to $1,400 (less than half of the maximum refundable credit available in 2021).
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blog December 14, 2021 ITEP Data on Child Tax Credit and Earned Income Tax Credit Provisions Before Congress
Congress expanded the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) for 2021 as part of the American Rescue Plan Act (ARP). The additional benefits that millions of… -
blog December 9, 2021 Tax Credits in Build Back Better Support Millions of Families
The EITC and CTC are proven poverty-fighting tools. The monthly CTC payments alone kept 3.6 million people out of poverty in October. This policy success is worth repeating.