At the beginning of 2021, Congress directed the IRS to send families monthly prepayments of up to half of their total anticipated 2021 child tax credits. These prepayments began in July and continued for six consecutive months, helping millions of American families in financial need. As of 2022, however, this tax break has failed to be extended by Republicans in Congress, leaving many parents to once again struggle for basic necessities like housing, clothing, and food.
In 2021, more than 2.2 million Pennsylvania children qualified for Child Tax Credit payments, contributing heavily to the general poverty rate decreasing from 14.3% in February to 9.3% after the first waves of the tax break. After the end of the CTC payments, however, the state’s poverty rate increased to 13.1%, just shy of the national 13.4% rate. Currently, 1 out of every 7.6 residents in Pennsylvania live in poverty, with 17% of Pennsylvania children falling below the line.
Opponents of the Child Tax Credit’s extension, including Pennsylvania Republican Senator Pat Toomey, had claimed that providing cash to families would only serve to impede anti-poverty efforts by persuading people not to work. They have continued to call for an addition of work requirements to any stipend program, which helped forestall the extension in Congress. However, in a widely recognized study last fall, Columbia University found that “the enhanced CTC has had no negative impact on workforce participation among parents.”
Advocates are quick to point out that the Child Tax Credit was meant to be a year-long program. There are two main barriers for receiving the credit, however, the first of which being that money will be given to those who file their 2021 income taxes this year. That could pose a problem for low-income families, who often do not file taxes, due to not making enough. Those who filed last year will also have received a break they won’t be getting in 2022. Second, even if people do file their taxes, the credit won’t be mailed to them in monthly installments as it was before, but instead as one lump sum, making it more difficult to meet monthly bills and payments.
According to a recently released Columbia University report (separate from the one previously mentioned), from the tax break’s final payment in December of 2021 to late January 2022, the national child poverty rate had increased – 12.1% in December to 17% in January.