Rural Michigan families deserve an expanded Child Tax Credit

A version of this column originally appeared in the Alpena News. It was authored by the League’s Tax Policy Analyst Anne Kuhnen and United Way of Northwest Michigan’s Executive Director Seth Johnson. 

In Michigan, an estimated 96,000 children younger than 17 living in rural areas are left out of the full $2,000 federal Child Tax Credit because their families earn too little.

A proposed expansion that makes the credit available to families with little or no tax liability is crucial to Michigan  families in rural areas who will significantly benefit from the change.

That is why the Michigan League for Public Policy and United Way of Northwest Michigan are partnering with child advocates across the state on an advocacy campaign to include the Child Tax Credit expansion in the end-of-year federal spending bill.

This week, we, along with the Accounting Aid Society, Mothering Justice, Michigan Community Action, Michigan’s Children, United Way for Southeastern Michigan, and the Michigan Association of United Ways, recently launched a public advocacy campaign to call on Congress to support expansion of the Child Tax Credit during the lame duck session of Congress.

The campaign will include billboard and digital advertising and calls for Congress to make permanent the Child Tax Credit expansion first introduced as part of the American Rescue Plan Act (ARPA), which kept 3.7 million children across the country out of poverty in the last month of 2021 before Congress failed to extend the provisions.

That includes more than one in four children in rural Michigan.

The Child Tax Credit is currently “upside-down,” because children in families with higher incomes can receive the full value of the credit, while families with low incomes may not earn enough. Prior to the expansion under ARPA, a family earning less than $30,000 was eligible for only a partial credit or no credit at all if their income was too low, which harms rural workers more because wages tend to be lower than in non-metro areas.

The median annual wage for rural residents is approximately 20% lower than in metro areas, helping to explain the disproportionate benefits for rural families and children.

For example, a single parent of two children working full time at the minimum wage — which is just $9.87 an hour in Michigan — would not be eligible for the full credit.

As Sarah Calame, research assistant at the national Center on Budget and Policy Priorities, recently wrote, “If Congress enables families with low incomes to receive the full credit amount (of $2,000) … the resulting income boost would help many families in rural communities provide more financial security for their children, including by putting food on the table and paying the rent and utilities.”

Calame also noted that “children of all races and ethnicities in rural communities have a stake in Congress expanding the Child Tax Credit. An estimated 3 million children living in rural communities nationwide are currently left out of the full credit. White children living in rural areas are more likely to be left out of the full credit than White children living in metro areas, just as Black, Latino, American Indian or Alaska Native, and Asian children living in rural areas are more likely to be left out of the full credit than Black, Latino, American Indian or Alaska Native, and Asian children living in metro areas.”

As families struggled to get through the COVID-19 pandemic and related economic strain, passing the American Rescue Plan Act and the expansion of the Child Tax Credit was a major policy win for the current Congress and the kids and families they represent in northern Michigan, around the state, and around the country.

Yet, as Congress considers its priorities for the end-of-year spending package, special interests are pushing for more tax breaks for profitable corporations — even as Michigan families face rising costs.

With the congressional lame duck session waning and a new U.S. House majority looming, Congress has one last chance to permanently expand the Child Tax Credit and have a major, lasting impact on child poverty.

The Michigan League for Public Policy, United Way of Northwest Michigan, and our partners around the state are urging the Michigan delegation to seize this opportunity to put kids and families first, not corporate tax breaks. Click here to tell Congress to expand the Child Tax Credit today.