In calling to revive the Democrats’ enhancement of the kid tax credit score in 2021, President Biden pointed to the truth that the availability helped slash the kid poverty fee that 12 months.
“Let’s restore the total youngster tax credit score, which gave tens of thousands and thousands of oldsters some respiration room and reduce youngster poverty in half, to the bottom degree in historical past,” he mentioned.
Details First: That is true. The kid poverty fee was reduce practically in half in 2021, and the expanded youngster tax credit score was the foremost issue. The enhancement accounted for the majority of the discount.
The kid poverty fee fell from 9.7% in 2020 to five.2% in 2021, based on the US Census Bureau’s Supplemental Poverty Measure, which takes under consideration sure non-cash authorities help, tax credit and wanted bills.
That’s a discount of 46%, sending the speed to the bottom degree for the reason that supplemental measure started in 2009.
The kid tax credit score – each the standard credit score and the enhancement – lowered the kid poverty fee from 9.2% to five.2%, or 43%, based on the Census Bureau. With out the beefed-up credit score, the speed would have solely fallen from 9.2% to eight.1%, or 12%.
As a part of the $1.9 trillion American Rescue Plan Act that handed in March 2021, Congress enhanced the kid tax credit score for one 12 months, beefing up funds to $3,600 for every youngster as much as age 6 and $3,000 for each ages 6 by way of 17, for lower- and middle-income households. For the primary time, half the credit score was paid in month-to-month installments from July by way of December, whereas dad and mom may declare the opposite half once they filed their 2021 taxes this 12 months.
Additionally, extra low-income dad and mom turned eligible for the total quantity as a result of lawmakers made it absolutely refundable.
