The Child Tax Credit and Its Impact on American Families

Phoebe Peterson

Let’s talk about how the Child Tax Credit, or CTC as it’s often called, has evolved over the years to become the vital support system it is for families today. Now, the CTC has been around for quite some time, but its journey really began to pick up steam with the American Taxpayer Relief Act of 2012. Back then, the credit was set at $1,000 per child—and while that may not sound like a whole lot by today’s standards, it was a significant boost for families struggling to make ends meet.

Phoebe Peterson

Fast forward to 2018, and we see a big change with the Tax Cuts and Jobs Act. This legislation doubled the credit to $2,000 per child and even allowed some families to claim part of the credit as a refund. That meant more money in the pockets of families, especially those in middle- and lower-income households. But and this is important, the credit didn’t extend equally to everyone. Families with very low incomes were often left out because the credit wasn’t fully refundable at that time.

Phoebe Peterson

And then came 2021—a truly pivotal year for the Child Tax Credit. The American Rescue Plan, signed into law by President Biden, brought some historic changes. For the first time, the credit was extended to include 17-year-olds, and the amount was significantly increased to as much as $3,600 per child for kids under six and $3,000 for those aged six to seventeen. On top of that, the credit was made fully refundable, meaning families who needed the help the most could now access the full benefit, regardless of their earnings.

Phoebe Peterson

What’s more, this expansion wasn’t just about numbers—it was about accessibility. For the first time, families in U.S. territories like Puerto Rico were able to fully benefit from the credit. And you know, these changes made a world of difference. I want to share the story of Maria, a mom of two from Texas. Thanks to the expanded Child Tax Credit, Maria was able to catch up on rent, buy healthy food for her kids, and even set aside some money for school supplies. She told reporters that it was the first time she didn’t feel trapped by bills and could actually focus on her family’s future.

Phoebe Peterson

So, the CTC didn’t just help individual families; it redefined what’s possible for millions of households across the country. And with that, let’s explore the ripple effects of these changes and how they impacted childhood poverty rates in 2021.

Phoebe Peterson

Now, let’s talk about what happened when the expanded Child Tax Credit really took effect in 2021. Honestly, the numbers are incredible—childhood poverty rates fell to historic lows. In fact, the expansion cut child poverty nearly in half that year. What’s even more striking is how quickly it made a difference. Within just a week of those first monthly payments going out, the percentage of families with children experiencing food scarcity dropped dramatically—from 13.7% down to 9.5%. That’s huge.

Phoebe Peterson

And you know, for families who were just barely getting by, this kind of relief was life-changing. The extra money helped pay for basic needs like groceries, rent, or even school clothes for the kids. One study conducted by the Urban Institute suggested that if the expanded CTC had been made permanent, it could have lifted an additional 4.3 million children out of poverty. It’s hard to overstate how much of a difference that would make for both these kids and their futures. I mean, it’s not just about today’s financial stability—it’s about breaking cycles of poverty for generations to come.

Phoebe Peterson

And it wasn’t just researchers and economists saying this. A lot of faith-based organizations really threw their support behind making these changes permanent. Groups like the National Association of Evangelicals and the Conference of Catholic Bishops urged Congress to renew the expansion, quoting scripture about caring for the least among us. Their message was clear: programs like this don’t just help families, they strengthen entire communities.

Phoebe Peterson

Phoebe Peterson

It’s clear that this policy didn’t just work, it transformed lives. But despite all of this, renewing the expanded benefits has been an uphill battle.

Phoebe Peterson

Alright, let’s tackle the challenges surrounding the Child Tax Credit. You might recall how transformative the expansion was back in 2021. But since then, we’ve seen some significant setbacks. In 2022, Congress failed to renew the expanded benefits, and the effects were immediate—child poverty surged by 41%. I mean, that’s just devastating.

Phoebe Peterson

Fast forward to 2025, and here we are again. The expanded benefits are still blocked, largely due to opposition in the Senate, and families are once again left with the pre-expansion limit of $2,000 per child. That’s far below the $3,000 or $3,600 families received under the expanded version. And get this, unless lawmakers take action, we could see the credit revert to just $1,000 per child after 2025. That’s not just a step back, it’s like erasing so much of the progress we’ve made.

Phoebe Peterson

It’s hard not to feel frustrated when you see the evidence staring us all in the face. Analytical reports, national surveys, even stories from everyday people—everything points to how impactful these expanded benefits were. Yet here we are, watching valuable resources that stabilize families and lift children out of poverty hang in the balance of political gridlock.

Phoebe Peterson

So, as I wrap up this discussion today, I just wanna say—thank you for spending time with me to really delve into this topic. These policies aren’t just numbers on a spreadsheet; they’re lifelines for millions of families. And even though the path forward may seem uncertain, I hope this conversation inspires all of us to think about ways we can advocate—for our families, for our communities, and for a future where no child is left behind. Until next time, take care of yourselves and those you love!