President Biden’s American Rescue Plan includes expanding of the Child Tax Credit (CTC) with recommendations that the credit be made fully refundable and that the maximum benefit be increased from the current level of $2,000 per child for children zero to 16 years old to $3,600 per child under six years old and $3,000 per child ages six through 17. The CTC would cut child poverty in half in 2021 and significantly reduce racial disparities for Black and Hispanic children. 


According to the Center on Budget and Policy Priorities, the CTC could lift nearly 10 million children above the poverty line, especially for parents who make too little to qualify for the current tax credit. In the National Academy of Science report, A Roadmap to Reducing Child Poverty, the idea of a child allowance is the extension of the Child Tax Credit that would provide “important benefits to some low-income families with children,” and play an important role in successfully reducing child poverty. The child allowance program, if implemented, would be a monthly cash payment of between $166 to $250 per month to families for each child living in the home. Making the child allowance more universal, families with low or no earnings would be eligible for the benefit.    


If the Child Tax Credit is included in the next relief package, the next move would be to make them permanent. Other modifications needed to ensure that the CTC advances racial equity would be to make the monthly payments for families and automatic, ensure ease to access for families and expand the CTC to all children in need, including children involved in child welfare systems. 


As part of the Child Allowance Coalition, CWLA has signed on to a letter to Congressional leaders urging for critical reforms to the Child Tax Credit. CWLA encourages you to email your Members of Congress to ensure that the expansion of the Child Tax Credit is included in the next relief package. Click here to take action