Child Tax Credit Update: Child Poverty Could Rise 17% This Month Without the Stimulus Money

·2 min read
Mladen Zivkovic / Getty Images/iStockphoto
Mladen Zivkovic / Getty Images/iStockphoto

The American Rescue Plan increased the child tax credit for millions of American families. However, the end of the advance monthly payments could cause the U.S. child poverty rate to jump 17% this month, a new study finds.

See: Tax Break Update — Child Care Credit Doubles to $16K This Year — How Can You Claim the Refund?
Find: Child Tax Credit Guidance Updated by IRS

According to the latest research from the Columbia University Center on Poverty and Social Policy, the child tax credit reached over 60 million children in December, keeping approximately 3.7 million children out of poverty for that month. The study estimates that the child tax credit reduced monthly child poverty by roughly 30%.

The study projected that the monthly child poverty rate could increase from 12.1% in December 2021 to at least 17.1% in January, the highest monthly child poverty rate since Dec. 2020. In June 2021, the month before the rollout of the advance monthly payments, the monthly child poverty rate was 15.8%.

“Since July, monthly payments of the Child Tax Credit have helped millions of families pay for essentials such as food, childcare, and other household needs as those expenses arise,” said Secretary of the Treasury Janet L. Yellen. “The lives of tens of millions of children across the country have improved because families have received tax relief when they need it most.”

See: Didn’t Get a January Child Tax Credit Payment? Here’s Why Not
Find: 52% of Parents Have Little to Nothing Saved for Their Children’s Future – How To Get Started Now

Within weeks of the first payment in July, data from the Census Bureau’s Household Pulse Survey showed that 55% of middle-income families spent their payments on food, more than 26% spent it on clothes and 23% spent it on school and after-school expenses.

President Joe Biden’s Build Back Better Plan, which included an extension of the enhanced child tax credit, hit a roadblock with opposition from Sen. Joe Manchin (D-W.Va.), whose vote was necessary to pass the legislation.

“Few federal programs have had such a direct & demonstrable impact on Americans as the expanded #ChildTaxCredit,” Rep. Suzan DelBene said on Twitter, as reported by UPI.

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This article originally appeared on GOBankingRates.com: Child Tax Credit Update: Child Poverty Could Rise 17% This Month Without the Stimulus Money

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