EXPANSION OF THE CHILD TAX CREDIT REDUCES POVERTY
In 2021, The American Rescue Plan (ARP) implemented a One Year Child Tax Credit Expansion. The ARP increased the credit from $2000 per child and it raised the age limit from 16 to 17 years. The plan provided a credit for all working families earning up to $150,000 per couple or a single parent family earning $112,500.
President Joe Biden’s proposed budget for fiscal 2024 includes a reinstatement of the expanded child tax credit. The Republicans and Senator Joe Manchin blocked the expansion of the child tax credit at the end of 2021. The current child tax credit provides for $2000 per child.
The Brookings Institute reported that the 2021 expanded child tax credit cut poverty in half across southern states. The report noted that states with low cost of living and a high poverty rate had the most significant reduction in child poverty. The tax credit had the most impact in states with large shares of historically vulnerable demographics, such as single mothers, rural families and Black communities. The U.S. had a record low child poverty rate in 2021 down to 5.2% of the population, down 46% from the prior year.
Georgia’s child poverty rate dropped from 27% to 19% during the pandemic. The ARP benefited an estimated 1, 374,000 Georgia families.
The state of Georgia ranks 38th in the nation for child and family well-being according to the 2021 Kids Count Data Book released by the Annie E. Casey Foundation. Georgia’s children struggle with economics, education, family and community and health well-being.