Today marks the sixth round of Child Tax Credit (CTC) payments going out to an estimated 1.2 million families in North Carolina, supporting the well-being of nearly two million children in the state. The temporary improvements to the CTC under the American Rescue Plan increased funding available to families, expanded eligibility by making the credit fully refundable, and changed the schedule for distributing funds so that half of the credit is distributed through monthly payments that began on July 15. But unless Congress acts to pass the Build Back Better legislation before the end of the year, December 15 marks the final day that families will receive monthly payments, and the gains that families have seen from the new CTC will be lost.
Recent research from the Center on Poverty & Social Policy at Columbia University estimates that the October CTC payment kept 3.6 million children across the country from poverty that month. These reductions in poverty translate to long-term benefits in kid’s educational attainment, health as adults, and future earnings. All children, white, Black, and Brown see big benefits from the credit, and the improved CTC is also helping to narrow racial inequities in child poverty. Lower child poverty means real improvements in children’s well-being, like living in safe and stable housing and having enough food to eat. The most common use of the CTC for North Carolina families is to purchase food, and this summer’s payments drove down food insecurity among families that received them. Monthly payments of the CTC are especially important for smoothing family incomes and allowing them to meet monthly expenses.
Recent analysis from the Center on Budget and Policy Priorities lifts up the state-level gains that will be lost if Congress does not extend the enhanced CTC.
In North Carolina:
- 90% of children experienced an increase in benefits.
- Among families with low incomes under $35,000:
- 87% spent CTC payments on basic needs, including housing costs, food, utility bills, and clothing.
- 93% spent CTC payments on basic needs and/or education costs like school supplies, tuition, or tutoring.
- 306,000 children were lifted out of deep poverty or above the poverty line.
Now is the time to keep making progress towards giving every child the opportunity to thrive in North Carolina and across the country. Poverty is a policy choice and the expanded CTC has shown that our legislators can make the choice to tackle child poverty head on. Now they must pass the Build Back Better bill and extend this successful policy.
Logan Rockefeller Harris is a Senior Policy Analyst at the N.C. Budget & Tax Center.