OpenSky Policy Institute, along with partners, called Monday for the U.S. Sens. Ben Sasse and Deb Fischer to consider prioritizing expansion of the Child Tax Credit and the Earned Income Tax Credit under an anticipated end-of-year budget bill in Congress.
Along with other measures, the expanded Child Tax Credit – passed as part of the American Rescue Plan – drove down child poverty to a record low of 5.2% in 2021 — down from 9.7% — the largest year-to-year drop ever. The expansion lifted 2.1 million children out of poverty, including 752,000 Latino children, 650,000 white children, 542,000 Black children, and 56,000 Asian children. In Nebraska 434,000 children and their families benefited from this expansion.
The overwhelming majority of those children in families with low incomes used the expanded Child Tax Credit’s monthly payment to cover everyday challenges and basic expenses, such as food, utilities, rent and diapers. Before the American Rescue Plan was passed, roughly 141,000 children in Nebraska and 27 million nationally received less than the full Child Tax Credit, including many who got no credit at all – not because they earned too much, but because of a flaw in the law that excludes children from families with the lowest incomes.
The expanded Earned Income Tax Credit also provided critical support to low-paid adults without children. This part of the Earned Income Tax Credit has not been adjusted for nearly 30 years (outside of a temporary, one-year Rescue Plan expansion) and as a result, about 6 million of these low-income workers 19 or older have incomes below the poverty line, once federal taxes are taken into account.
By expanding the CTC and EITC, Congress can put more kids on an upward trajectory for life, and help working families make ends meet as the country continues to recover from the pandemic.