Last week on Sept. 15, the third round of payments for the newly expanded federal Child Tax Credit (CTC) went out to millions of families with children across the country. The CTC is one of the nation’s key anti-poverty programs, and the American Rescue Plan Act made some important — but temporary — changes to the policy. It increased the amount of funding available to families, expanded eligibility by making the credit fully refundable, and changed the schedule for distributing the funds. Half of the funds are now distributed through monthly payments that began on July 15, rather than all payments being distributed in a lump sum when families file their taxes.
The expanded CTC is already leading to dramatic reductions in childhood poverty: Payments in July kept about 3 million children across the country out of poverty that month. To maximize the CTC’s impact in North Carolina, our state leaders must ensure that every eligible family receives the credit, while Congress needs to make these improvements to the CTC permanent.
Recent analysis from the Social Policy Institute explores how families in each state used Child Tax Credit payments. Families earning under $150,000 per year are eligible for monthly payments of $300 for each child under age 6 and $250 for children between the ages of 6 and 17. The Institute’s researchers found that the most common use for North Carolina families was buying food, followed by paying essential bills. Half of families reported using the funds to buy food, and nearly two out of five families said they paid bills. It’s not surprising then that families eligible for the CTC saw a decrease in severe food insecurity after monthly payments began. The share of families experiencing severe food insecurity dropped from 11 percent before payments went out down to 7 percent in the weeks after payments began.