10 Million Children Will Return to Poverty if the Child Tax Credit Ends

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Since July 2016, nearly 36 million families began receiving advanced child tax credits to help with financial struggles, reduced income, and poverty during the pandemic. Now, as the Build Back Better legislation, which would extend the enhanced CTC, sits in debate in Congress, a study reveals that close to 10 million children could fall back into poverty if the CTC is not extended.

See: Are Child Tax Credit Payments Taxable?
Find: Didn’t Get Your Child Tax Credit? Here’s How to Track It Down

The Center on Budget and Policy Priorities noted that, if the enhanced CTC is not extended past this December, 27 million children will receive less funding in the future – and in some cases, nothing at all. The CBPP report shared that roughly 9.9 million children could fall back to the poverty level without the enhanced, advance credit.

A separate study from Columbia University found that the credit has already reduced child poverty by 25%. If the credit continues through 2022, as outlined in the Build Back Better legislation, it could reduce child poverty by more than 40%, CNBC.com reports.

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The credit currently delivers payments of $250 per child between the ages of 6 and 17 into parents’ or legal guardians’ bank accounts monthly. Americans can claim the remainder of their credit, up to $3,000 per child for the year, on their 2021 taxes. For children under 6, the amount rises to $300 per child, maxing out at $3,600 per child.

Stimulus Update: Build Back Better Plan Contains Language to Repeal SSN Tax Code from Child Tax Credit Child Tax Credit Recipients: How To Prepare Your Taxes for 2022 According to IRS Guidelines

If the provision does not remain in the Build Back Better bill, the credit would drop to $1,000 per school-aged child and $1,600 per child under 6. Additionally, advance tax credits would disappear and the CTC would be filed as a fully refundable tax credit on federal taxes. Perhaps most significantly, families who fall under the income threshold to file taxes – or who have no income to report – would lose the credit entirely.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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