Racial justice organizations want to restore child tax credit

Residents of the Washington region, DC, Cara Baldari and her 9-month-old daughter Evie (left) and Sarah Orrin-VIminue and her 8 month old son, Otto (right), join a rally in front of the Capitol of United States on December 2. 13, 2021.

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Racial justice organizations say bringing back the enhanced child tax credit with monthly checks would help lift millions of children out of poverty at a time when their families are struggling with rising prices due to inflation and economic uncertainty.

This is why a group of more than 40 groups of this type, including Unidosus, NAACP, the economic security project, the national urban league, action for community change and the conference on leadership, sent a letter advocating the restoration of the enhanced tax credit to Senate Majority Leader Chuck Schumer. , DN.Y., in May.

In the letter, the groups noted the impact the end of subsidized credit had on families, and especially families of color, when it expired in December.

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“The impact of the end of monthly CTC payments has been particularly profound — and painful — for communities of color,” the letter states.

How the child tax credit has helped low-income families

The Child Tax Credit was enhanced as part of President Joe Biden’s U.S. bailout signed into law in March 2021. In the last six months of 2021, families with eligible children received monthly payments of up to $300 per child through the credit. The second half of the credit went to families this year in the form of a tax refund.

The benefits of improved credit were widespread, reducing child poverty, food insecurity and financial anxiety for millions of families with children. These findings were greatest for black and Latino children.

Making the credit fully refundable — meaning families with no or very little earned income could still receive its full value — extended the benefit to 27 million children, according to data from the Center on Budget and Policy Priorities. This included half of black and Latino children who were previously unable to qualify for the credit or only got a partial benefit.

“It’s really helped a lot of low-income families,” said Brayan Rodriguez, senior policy analyst at UnidosUS.

When credit enhancements expired at the end of 2021, the benefits families received through monthly checks were quickly reversed. Millions of children have fallen back into poverty, the Center on Budget and Policy Priorities found, and food insecurity and financial instability have rebounded. Today, amid the highest inflation in about 40 years, about half of low-income families are struggling to buy enough food without the credit.

“While the rate of poverty in white children will also increase, it will nevertheless remain almost two thirds less than that of black and Latinos children,” said the letter of racial justice organizations. “It is simply unacceptable.”

Growing up in poverty also has negative consequences for these children later in life.

“The impact of poverty is very detrimental to all the children who have experienced it and we have the possibility of ensuring that at least children who receive this credit do not undergo these consequences,” said Rodriguez.

What could happen next for the child tax credit

Of course, the regular child tax credit is still available to families with qualifying children. Instead of getting advanced monthly payments and the higher amount of the enhanced benefit, families can claim the initial credit, which is up to $2,000, when they file their 2022 tax return. ‘next year.

The enhanced child tax credit was included in Democrats’ Build Back Better plan, a roughly $1.75 trillion economic bill that failed to pass the Senate. Now, as Democrats attempt to rework the proposal, the enhanced Child Tax Credit is in play — it was one of the initiatives President Biden was willing to drop from legislation in an attempt to pass.

There is also another proposal that could bring a similar monthly payment back to families with children. Sen. Mitt Romney, R-Utah, this week reintroduced a plan that would send some families with children up to $350 a month per child. Romney’s plan, however, would include a work requirement: Families would have to earn at least $10,000 during the year to get the full benefits.

There are two elements of the improved delivery that defenders would like to see continue. The first is the credit’s full refundability, which has allowed it to reach more children than ever before.

“It was the children who struggled the most before and for whom the CTC made the most difference, and who were really left behind by the expiration,” said Adam Ruben, director of the economic security project.

The second element that proponents want to preserve is monthly payments, which helped families meet day-to-day expenses, he added.

According to the Urban Institute, extending subsidized credit to 2025 would have significantly reduced child poverty and saved more than 4 million children from living in poverty.

“Poverty is a political choice,” the organizations wrote in the letter. “Allowing millions of children, including more than 2.5 million black and Latino children, to fall back into poverty is also a political choice.

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