Bipartisan Child Tax Credit expansion would lift hundreds of thousands of children out of poverty

We’re pleased to feature this blog co-written by Matt Gillard, President and CEO of Michigan’s Children, and Monique Stanton, President and CEO of the Michigan League for Public Policy. A version of this column originally appeared in Bridge Michigan.

Matt Gillard

Monique Stanton

The two of us have dedicated our lives to the wellbeing of children, both in our roles as advocates and in our roles as parents. And right now is a pressing time for us to come together and fight for kids in Michigan–almost 18% of whom are living in poverty–and around the country.

Congress has a bipartisan tax package currently on the table, and it could move mountains for our nation’s kids. In it is an expansion of the Child Tax Credit that will work the way it should for all families–especially those families with low incomes.

The bipartisan federal expansion would lift as many as 400,000 children above the poverty line nationwide in its first year and an estimated half a million children or more out of poverty once it takes full effect in 2025.

As it stands today, approximately 19 million children in our country are excluded from the full $2,000 federal Child Tax Credit–receiving only a partial credit or none at all–because their families earn too little.

These are the very children who need the credit the most and, yet, they receive far less than children growing up in middle-income and high-income households because of the credit’s current, upside-down structure. The proposed Child Tax Credit legislation would, in its first year, benefit more than 80% of these children–around 16 million children total, including 474,000 kids right here in Michigan. Notably, this would include nearly 3 million children who are under the age of 3 and are, therefore, in the most important years of their development and need the most support.

And while the expansion would provide meaningful change for children of all races and ethnicities, it would have a particularly significant impact on Black, Latino and American Indian and Alaska Native (AIAN) children as their parents are disproportionately represented in lower-paying jobs as a direct result of past and present-day racial discrimination. Across the country, more than 1 in 3 Black children, more than 1 in 3 Latino children and 3 in 10 AIAN children under 17 would benefit from the proposal in the first year, while 1 in 7 white and Asian children would benefit from it in that same time period.

This is especially relevant, given that the Annie E. Casey Foundation’s recent Race for Results® report shows a nationwide failure to equip all children to succeed, with policy choices and lack of support for families that has led to particularly dire outcomes for Black, Latino and AIAN children. Ensuring more money is going back into the pockets of these children’s families will certainly help to improve these outcomes.

This new proposal before Congress provides hope for American families who are struggling to provide for their children in the midst of the end of many pandemic-era policies that made a meaningful difference in their lives as well as inflation that has not kept pace with the wages of hard-working people. And while the proposed expansion is more modest in terms of size and impact than the enhanced, but temporary Child Tax Credit offered during the height of the pandemic, it is an important move toward combating child poverty at a crucial time, especially given that child poverty more than doubled in our country from 2021 (5.2%) to 2022 (12.4%) according to the Supplemental Poverty Measure. The U.S. Census Bureau points to the expiration of several pandemic-era supports, including the temporary expansion of the Child Tax Credit, as playing a part in this troubling increase.

This bipartisan tax package must make it past the finish line for the families here in Michigan and across our country who are struggling to get by. While it’s not a perfect package, it offers several provisions that make it especially well targeted for the families that need it most, including a per-child phase-in, an end to the credit’s refundability cap over time and a “lookback” provision that will protect families from a drop in their credit if their earnings decline from one year to the next.

While much more needs to be done to address child poverty in our country and state, this proposal is a promising step in the right direction and Congress should act quickly to make it a reality.