Permanent expansion of Child Tax Credit can tackle kids’ and parents’ needs beyond pandemic
A version of this column originally appeared in the Lansing State Journal.
On July 8, while Lansing area kids were running through the halls and playing on the playground at Foster Community Center, I was inside the gymnasium to discuss an important policy change that stands to benefit nearly every child in the Capitol City and around the state.
I attended a press conference held by Sen. Debbie Stabenow to discuss the new improvements to the federal Child Tax Credit (CTC) made in the American Rescue Plan, including the advance payments that are beginning this month. She was joined by Rep. Elissa Slotkin, Mayor Andy Schor, Cristo Rey Community Center Executive Director Joe Garcia, Michigan’s Children CEO Matt Gillard and Lansing area mother Anita Cobb, who each spoke to the benefits of the CTC to their constituents, communities and, in Anita’s case, household.
Passed by Congress and signed by President Joe Biden in March, the federal American Rescue Plan Act (ARPA) improved the Child Tax Credit for 2021 by increasing the maximum credit amount to $3,000 per child between 6 and 17 and $3,600 for children under 6 years old. Families with incomes of up to $150,000 for a couple or $112,500 for a single parent are eligible for the full credit.
Around 90%—or 1,970,000—of Michigan children will benefit from this year’s improvements to the CTC. The improved Child Tax Credit is also fully available to families with the lowest incomes—or that don’t earn any income—for the first time this year, which stands to reduce child poverty by 44% statewide, including by 52% percent for Latino children and by 43% for Black children.
The CTC provides money to families that can help pay for groceries, housing, kids’ clothing, child care, doctor’s visits and prescription costs, ultimately benefiting the local economies and businesses where they live.
With ARPA, our leaders in Washington have met the challenge of a once-in-a lifetime crisis with historic and transformational investments. Expanding the CTC not only serves to help counter the economic impact of the pandemic, but it will also help beat back the plague of child poverty and economic insecurity—a persistent problem in Lansing, in Michigan, and in the United States.
The Michigan League for Public Policy’s 2021 Kids Count in Michigan Data Book released last month shows that child poverty for Ingham County in 2019 (the most recent year available) was 17.6%. While this is an improvement from 2010, the rate is still too high, and we have yet to see what the impact of the pandemic has been on child poverty.
Furthermore, the data book found that 42.9% of Ingham County households were in poverty or ALICE (Asset Limited, Income Constrained, Employed). ALICE represents households that are above the federal poverty level, but whose earnings are not enough to afford a “survival budget” based on the bare-minimum cost of household necessities.
Unfortunately, the struggles of Michigan kids and families preceded the pandemic, and will continue long after unless we make real, positive changes. These Child Tax Credit improvements are a great start, but Congress has a real opportunity to improve kids’ long-term prospects for generations to come by making them permanent. Sen. Stabenow and Sen. Gary Peters have already endorsed the permanent expansion of the federal Earned Income Tax Credit and CTC, and we hope their colleagues in Congress will join them in passing legislation in the coming months to do just that.
For more information, parents and advocates can visit childtaxcredit.gov or contact the local Volunteer Income Tax Assistance office at 866-561-2500.
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