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Child poverty surges after Child Tax Credit payments end

Parents encouraged to claim Child Tax Credit
White House urges parents to file taxes to get second half of Child Tax Credit 07:16

The poverty rate for children in the U.S. has surged since monthly government checks from the expanded Child Tax Credit ended in December, according to a recent study from Columbia University researchers. 

An additional 3.7 million children slipped into poverty in January, their analysis found. That pushed the national child poverty rate to 17% last month compared with 12.1% in December — the highest poverty rate for kids in the U.S. since the end of 2020, the researchers noted. A total total 12.6 million children were living below the poverty line as of last month, compared with 8.9 million in December, the study found.

Anti-poverty experts had warned that the end of the monthly payments could impact millions of children. The enhanced CTC, which expired on December 31 when the Build Back Better Act stalled in Congress, had provided a monthly payment of up to $300 per child — money that families said helped them pay for essentials like rent, food and gas.

"It's been a struggle"

One mom told CBS MoneyWatch that the end of her family's $500 monthly CTC payments has forced her to cut back on basics.

"It's been a struggle — we have less food on the table," said Meighen Lovelace, a mom in her 40s who lives in Avon, Colorado, with her two daughters, ages 10 and 14. "I also haven't been able to get all of my daughter's medications. Some aren't covered by insurance, so we haven't been able to buy those."

She added, "And we turn our heat pretty low and sleep in our sweaters to keep the heating bill down."

Lovelace said one of her daughters' disability means she spends much of her time  providing care, which limits her ability to work. The CTC checks enabled them to pay for essentials like gas, medicine and rent, but the family's financial situation is precarious since the checks ended, she said.

"It's not just the money part — it's the sense of safety and ease" of knowing when the monthly checks would arrive, Lovelace said. "When we cannot budget for it, there is a heightened sense of stress knowing that we have to find a way to pay for our basic needs."

CTC and tax refunds

The expanded tax program provided a credit of $3,600 for children under 6 and $3,000 for each child between 6 and 17. Half of the credit was paid in monthly installments between July through December 2021 — $300 a month for younger children and $250 per month for older kids — with parents claiming the other half on their tax returns. 

With the tax season open through April 18, it's likely that most families will receive that second half of the CTC through their tax refunds. That could provide some monetary relief, but the support won't last: In 2022, the CTC reverts to its earlier level, which provides $2,000 per eligible child. Full payments also only go to families who earned enough to owe taxes, which means the nation's poorest families aren't likely to qualify.

Tax refunds could provide temporary relief for millions of families, but child poverty rates are likely to remain elevated, the Columbia researchers predicted.

Families face budget strain as monthly child tax credit checks stop 05:37

"Following the conclusion of tax season, however, it is likely that monthly child poverty rates could be persistently high through the rest of 2022 absent the continuation of an expanded Child Tax Credit, further policy interventions, or strong improvements in labor market outcomes," they wrote.

Black and Latino children have been impacted more than White children by the end of the CTC payments, the researchers found. The poverty rate for Latino children rose 7.1 percentage points between December 2021 and January of this year, and Black children saw a 5.9 percentage point increase, they found; White children saw a 3.9 percentage point increase in poverty. 

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