NC needs to make sure every eligible family receives the expanded Child Tax Credit

National analysis conducted by the Census Bureau shows that the first payment to families of the temporary and expanded Child Tax Credit (CTC) worked to bring down challenges with paying for household expenses and reduced food insecurity.

This builds upon the solid foundation of research that cash income matters in households — and households with children in particular.

It is also common sense. With more income available, people are able to meet basic needs that otherwise go unmet and often generate greater costs and greater hardship in the future.

In North Carolina, an estimated 924,000 children were excluded from receiving the full benefits of the CTC before the expansion. After expansion, some 130,000 children were estimated to be lifted out of poverty by the expanded credit, which both provided additional value and ensured that families with very low incomes would receive the credit.

Now with the expansion, there remain two issues for families with children.

The work to make this temporary policy permanent — something that’s a significant part of the federal budget debate right now — is a top priority.

But an equally important issue that hasn’t gotten nearly enough attention in North Carolina is making sure that everyone who is eligible receives the CTC. By ensuring maximum take-up of the CTC, children, families and the broader economy will benefit.

In North Carolina, an estimated 46,000 children were in newly eligible families that did not file income tax returns in 2019 and 2020. A low estimate is that $138 million is not going to families and children where it can generate the powerful benefits of increasing security of food and finances. An estimated additional 52,000 newborns are also likely eligible but not currently receiving the CTC.  The Center on Budget and Policy Priorities estimate that $337 million is the Child Tax Credit total for families who need assistance to claim it.

In every NC House and Senate district, there are households that will need to be reached to make sure that they receive the Child Tax Credit this year.

A new report from the Center on Budget & Policy Priorities details the proven tools to increase take-up. Among them are:

• Including information about the Child Tax Credit at all public agencies and enrollment sites for other public programs;
• Providing on-site tax filing support for families at local Department of Social Service offices, Community Health Centers, child care or K-12 schools;
• Using state and federal resources to fund outreach campaigns to get the word out; and
• Funding direct help for families to file for the Child Tax Credit and other benefits for which they may be eligible but are not receiving.

North Carolina policymakers can make a commitment to these families in every district of the state that they will help families connect to the resources that have already been made available to them through federal action. It would serve as a demonstration that they recognize the hardship that too many North Carolina families with children continue to face and the high costs of ignoring it to us all.

Alexandra Forter Sirota is Director of the Budget & Tax Center. Logan Rockefeller Harris, a Senior Policy Analyst for the Budget & Tax Center, contributed to this report.

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