The Institute on Taxation and Economic Policy released a new report, Expanding the Child Tax Credit Would Advance Racial Equity in the Tax Code, on August 29, 2023, examining the Child Tax Credit under current law and the House expansion proposal, introduced by Representative Rosa DeLauro (D-CT). The report makes the following key findings:

  • “Expanding the federal Child Tax Credit to 2021 levels would help nearly 60 million children next year. It would help the lowest-income children the most and would particularly help children and families of color.
  • Black and Hispanic families are disproportionately harmed by current rules preventing low-income people from receiving the full federal Child Tax Credit. Next year, 45 percent of Black children and 42 percent of Hispanic children will not receive the full credit, roughly double the percentages of white and Asian children who are left out.
  • If lawmakers reinstated the 2021 credit, no children would be left out because their families’ earnings are too low.
  • Black and Hispanic families with kids would receive slightly larger average credits under this expansion since it targets low- and middle-income households and because white children are disproportionately in families whose incomes exceed $150,000 and therefore do not qualify for the full credit. This would partially offset existing inequities in the tax code and help shrink the racial wealth gap.”