Child tax credit recipients experienced a larger decline in food insecurity and a similar change in employment as nonrecipients between 2020 and 2021
- Collection:
- Health Policy and Services Research
- Author(s):
- Karpman, Michael, author Maag, Elaine, author Zuckerman, Stephen, author Wissoker, Douglas A., author
- Contributor(s):
- Brookings Institution, issuing body. Urban-Brookings Tax Policy Center, issuing body. Urban Institute, issuing body.
- Publication:
- [Washington, DC] : Urban-Brookings Tax Policy Center, May 2022
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Employment -- statistics & numerical data Financing, Government -- economics Food Insecurity -- economics Health Equity -- economics Health Expenditures -- statistics & numerical data Health Policy Poverty -- economics Social Mobility United States
- Genre(s):
- Technical Report
- Abstract:
- The American Rescue Plan (ARP) Act of 2021 temporarily increased the amount of the child tax credit (CTC) for most families with children. It also directed the IRS to deliver up to half the credit in advance of the tax filing season in monthly payments from July to December 2021. For the first time in the credit’s history, even families with very low incomes were eligible to receive the maximum benefit. The sixth and final monthly advanced payment reached the families of more than 61 million children, representing most children eligible for payments. The introduction of the advanced CTC payments was associated with a near immediate decline in child poverty and food insufficiency (a measure of whether households did not have enough to eat in the past week) among households with children. Recent surveys suggest few parents planned to work less because of the credit and that the payments made it easier for some parents to engage in paid work or work more hours. Other research found the payments had no immediate effect on reducing employment . Researchers have also produced estimates of the effect a permanent expansion of the credit could have on incentives to work; some suggest modest responses that would still result in dramatic reductions in poverty and others suggest larger employment declines. In this brief, we add to the assessment of how the CTC affects employment and material hardship with data from the 2020 and 2021 rounds of the Urban Institute’s Well-Being and Basic Needs Survey (WBNS). We estimate changes in material hardship and employment for adults living with children who received advanced CTC payments and compare them with changes for adults with and without children who did not get the payments. The WBNS allows us to follow the same adults between December 2020 and December 2021, providing insight into how their well-being, work status, and work hours changed after the advanced CTC payments became available in July 2021. Our analysis focuses on adults with annual family incomes in 2020 below 600 percent of the federal poverty level (FPL), about $103,500 for a single person with one child and $157,200 for a family of four. The enhanced CTC amount began phasing out at $112,500 for single parents filing as heads of household and at $150,000 for married couples filing jointly. The regular CTC amount continued to phase out at $200,000 for single parents and $400,000 for married couples.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-DC license. (More information)
- Extent:
- 1 online resource (1 PDF file (15 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918486683506676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918486683506676