A nonprofit publication of the Kentucky Center for Public Service Journalism

Jason Bailey: Expanded Child Tax Credit is landmark victory against child poverty, let’s not let it vanish


This week Kentucky families began benefitting from the most extraordinary policy change to address child poverty in many decades — payments of up to $300 per child, per month to help ease the costs of raising kids.

These payments are advances on an expansion of the child tax credit contained in the American Rescue Plan Act (ARPA). Previously, families got a $2,000 credit per child when they filed taxes, but nearly half of Kentucky children received less than that amount or nothing at all because their incomes were so low. ARPA ends that unjust barrier for the poorest families and increases the amount for all kids to $3,000 per child below the age of 6 and $3,600 per kid for those ages 6-17.

The monthly advance payments that started this week will continue through December and will add up to half of the credit, with the other half coming when taxes are filed early next year.

Jason Bailey

Why is this expansion so important? The startling fact is that the most common way to become poor in the richest nation on earth is simply to be born. Children are the largest group of people who live in poverty, making up 30% of the total in Kentucky. Many adults also fall below the poverty line because of the expenses and demands of raising children in an economy made up of so many low-wage jobs.

Though it sometimes appears that solving child poverty is a great mystery, defeating it in fact is not complicated. The cornerstone is what other wealthy nations around the world already do — provide a child financial allowance that helps families with kids make ends meet. This expansion allows the United States to join their ranks.

The benefits to kids are large. The expanded child tax credit will lift a phenomenal 44% of Kentucky children above the poverty line. For the poorest 1 in 5 Kentucky families with kids, it will mean $4,240 more a year on average in their pockets, increasing their families’ incomes by 1/3. The effect will be most meaningful for those facing the greatest hardship, from battling homelessness to struggling with food insecurity.

The expansion is the kind of policy that gets to the heart of struggles facing families in both urban and rural Kentucky, whether white, Black or brown. The payments will be a lifeline in the 17 rural Kentucky counties where the child poverty rate exceeds a staggering 40%.

And the benefits of the credit are much more widespread than just for those in poverty. It will help nearly all families with kids better afford the substantial costs of raising children, ranging from diapers to child care to gas in the car. The families of nearly 1 million Kentucky kids, or 92% of the state’s children — all but the wealthiest — will receive the credit.

The monthly payments that started this week will also help strengthen recovery from the COVID-19 recession. It will mean $1.6 billion more into the Kentucky economy this year, a stimulus that will support businesses and communities as the dollars are spent and circulated through local economies.

And the evidence shows that it can have positive impacts far into the future. A major 2019 congressional report from the National Academy of Sciences found that higher family incomes in childhood are linked to long-term gains for children, including better health and improved educational attainment later in life.

While most families are receiving the payments automatically, those that did not file taxes the last two years and didn’t sign up to get stimulus checks must take action to receive them. They can visit www.childtaxcredit.gov to learn more and to access the non-filer tool to sign up, and we need state and local governments and organizations to spread the word and help get people signed up. Families can also use that tool if they’d rather receive the credit as one lump sum payment at tax time rather than getting half in advance as monthly payments.

It’s critically important that this landmark victory on the road to ending child poverty doesn’t end this year. When Social Security was created during the Great Depression, it was transformational for elder poverty, and it was not a one-year program. We shouldn’t expect any less for our kids.

President Biden has proposed extending the expansion in his American Families Plan, and Democrats in Congress are now advocating to make it permanent in the reconciliation package under development. Choosing to let it expire after this year is to voluntarily push our most vulnerable children back into deeper hardship.

Our failure to protect kids from poverty is a stain on our national record. Cleaning it up can begin by protecting this expanded credit.

Jason Bailey is executive director of the Kentucky Center for Economic Policy, www.kypolicy.org.


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One Comment

  1. Richard says:

    This tax credit (i.e. direct payment) is being paid for by record deficit spending. Have you thought about the consequences of continued fiscal irresponsibility?

    Why should families not living in poverty receive these payments? Sounds a lot like socialism and buying votes to me.

    How many of these children are raised in fatherless homes? How will behavior change if society removes the consequences and we continue to prop up bad behavior?

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