The Expanded Child Tax Credit Is Helping Families But National Research Survey Shows Continued Outreach Remains…
Summary
April 2022 report, printed with clasp.org page footers, on a national survey of 1,012 families earning under $75,000 with children under 18, conducted online with Ipsos in the second and third weeks of October 2021, about the expanded Child Tax Credit (CTC). Under the American Rescue Plan Act of 2021 the credit rose to $3,600 per child ages 0 through 5 and $3,000 for ages 6 through 17, with half paid as advance monthly payments from July through December 2021. About 78 percent of parents who filed a tax return in the past two years reported receiving the monthly benefit, and parents reported spending it on necessities like food, rent and clothing. White respondents were likelier than Hispanic respondents to report receiving the payments (67 percent compared to 61 percent), and very few families used the IRS non-filer portal.
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The Expanded Child Tax Credit is Helping
Families, But National Survey Shows
Continued Outreach Remains Essential
April 2022
2 The Expanded Child Tax Credit is Helping Families
Introduction
The expanded Child Tax Credit (CTC) provided monthly payments to nearly 9 in 10 children in the
United States, and it dramatically reduced child poverty in 2021. 1,2 According to an October
survey of over 1,000 parents with children, the monthly CTC payments reached a wide majority of
families and improved family wellbeing. Parents reported spending their CTC payments on
necessities like food, rent, and clothing. At the same time, some parents surveyed reported that
they were not receiving the payments, did not understand why, and struggled to use the tool
available for “non-filers” to access the credit. For the CTC to have its full impact, lawmakers,
government agencies, and community organizations must do more to ensure that all eligible
families are able to access it.
U.S. child poverty rates were high long before the COVID-19 pandemic, disproportionately
impacting Black and Latinx children. This phenomenon is due to numerous systemic factors,
including the generational racial wealth gap; discriminatory policies in housing, health care, and
access to higher education; hiring discrimination in employment; and wage gaps and other
factors. The public health crisis magnified existing disparities, hitting Black and Latinx individuals
and families especially hard. 3,4 Child poverty for Black and Latinx children increased at higher
rates than that of white and Asian American children. 5
Many lawmakers and scholars have proposed a child allowance to financially support children
and caregivers and reduce child poverty. In 2021, the American Rescue Plan Act of 2021 (ARP)
temporarily provided many families with a monthly cash benefit per child through the expanded
CTC.
Under the ARP, lawmakers temporarily increased the CTC to $3,600 per child ages 0 through 5,
and to $3,000 for children ages 6 through 17. The ARP also made half of the CTC amount available
to families as advance monthly payments from July through December 2021, rather than a lump
sum paid as a tax refund after filing a tax return. Those payments were a maximum of $300 per
month per child ages 0 through 5, and $250 per month for children ages 6 through 17.
The ARP also made the CTC temporarily available to families with little to no income. This
provision especially benefitted children of color, who were more likely to be denied the full CTC
benefit under prior law due to not having enough income to owe federal income taxes or to
receive the full CTC benefit. 6 These CTC expansions apply only for tax year 2021. Despite its
temporary nature, the program had dramatic impacts on improving a family’s ability to afford
necessities, in reducing hunger and decreasing financial stress among parents.
Our nationally representative survey of CTC-eligible parents evaluated the reach and impact of
the CTC. The survey was designed and distributed in consultation with colleagues at the
Children’s Defense Fund, the Center for the Study of Social Policy (CSSP), the Center for Law and
Social Policy (CLASP), ideas42, the National Women’s Law Center (NWLC), Prosperity Now, the
Urban Institute-Brookings Institution Tax Policy Center, and UnidosUS. Those organizations
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3 The Expanded Child Tax Credit is Helping Families
collaborated with Ipsos, an international polling firm, and researchers at the University of
California, Berkeley who provided technical guidance in formatting and analyzing the survey. The
online survey was conducted in the second and third weeks of October 2021, after the IRS had
distributed up to three months of advanced monthly CTC payments to families. 7
This October survey builds on the previous research conducted by the team through a similar
survey in July 2021, prior to the distribution of the advance monthly payments. The July survey
asked about respondents’ awareness of the upcoming CTC payments, their prior tax filing
behavior, and how parents planned on spending their CTC payments. 8
This October national survey reached 1,012 families earning under $75,000 yearly and with
children under 18 years old living in the household. Survey respondents were weighted
statistically to yield nationally representative results. The topline averages reflect a margin of error
equaling 2 to 3.5 percentage points. The October national survey did not include respondents
from Puerto Rico or other U.S. territories due to their ineligibility for the advance CTC payments.
Upcoming CTC research will include Puerto Rican families.
The October survey aimed to gauge awareness of the monthly CTC payments and the reach of the
payments, and to measure how the payments were impacting family wellbeing. We also gauged
the variation in access to the CTC among demographic groups and its impacts on family
wellbeing depending on the family’s race, income, and educational attainment.
An earlier report documented the initial findings from our October 2021 CTC survey. 9 In this
report, we provide additional findings from that survey, along with detailed analyses for
subgroups, including race, income, and educational attainment.
Berkeley researchers conducted follow-up, in-depth phone interviews with consenting survey
respondents about their awareness of the CTC and how their CTC payments have impacted their
lives. We illustrate this impact on families with quotes gained from these follow-up phone
interviews throughout this report.
The key survey findings include:
• The CTC monthly payments reached a wide majority of eligible parents.
• The monthly CTC payments improved reported wellbeing for parents.
• Families – including Black, Hispanic, * and white respondents – are spending their
monthly CTC payments on necessities like food, rent, and clothing.
• The most common reasons respondents reported for not receiving the monthly CTC
were confusion or opting for a lump-sum CTC refund at tax time.
• Very few families accessed the IRS non-filer portal, and those who utilized the tool
often reported confusion when using it.
*
We are using the phrase “Hispanic” when referring to the survey respondents because this is the label that the
Ipsos polling firm uses to classify this demographic of respondents.
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4 The Expanded Child Tax Credit is Helping Families
• Hispanic families, households with the lowest incomes, and eligible taxpayers with
lower educational attainment have higher barriers to claim the expanded CTC
compared to their counterparts.
• Other tax credits – like the Economic Impact Payments, the Earned Income Tax Credit
(EITC), and the Child and Dependent Care Tax Credit (CDCTC) – are also being claimed
at high rates by families with children.
These findings demonstrate the importance of the expanded CTC for families with children.
Without the expanded monthly payments, parents will lack critical financial support that helped
them afford essential bills, food, and rent. This means that children and families will have a harder
time meeting their ongoing basic needs. Caregivers will face increased financial stress, some
parents will face problems keeping child care and other barriers to holding down a job, and
children will have fewer books, toys, and enrichment activities because of the CTC expansions
expiring. Simply put, families are better off with this investment.
Filing a 2021 tax return, which families were able to do as early as January 24, 2022, offers the
opportunity for families that received the advanced payments to receive the rest of the CTC they
are eligible for. It also provides an opportunity for eligible families that have not received the
advanced credit to get the entire CTC. In many cases, these will be the families with the lowest
income. 10 Families with children in Puerto Rico will have to claim their full CTC when they file a
2021 tax return. In the case of other eligible territories, families might have to contact their local
U.S. territory tax agency. 11
“It certainly helps to get [the CTC]. It would be a mistake to cut it. I know
several people who really rely on it.”
– Rick, Father of 6-year-old and 2-week-old infant in West Virginia
The CTC is Reaching the Majority of Parents
One of the biggest concerns of implementing the CTC expansions in 2021 was ensuring all
eligible parents knew about the program and received the monthly payments. This was especially
pertinent for parents with the lowest incomes, who were newly eligible for the full credit in 2021,
though may not have benefitted from it or been required to file tax returns in the past. Because
the credit was made temporarily fully refundable in 2021, even families with the very lowest
incomes could receive the full credit.
Some families with very low income who had not filed a tax return in either 2019 or 2020 received
the advanced CTC payments automatically because they had used a non-filer portal to access the
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5 The Expanded Child Tax Credit is Helping Families
Economic Impact Payments (EIPs, or stimulus payments) in 2021. If they had not claimed an EIP,
the parent would typically need to sign up for the CTC online using a non-filer portal or wait until
early 2022 to file a 2021 tax return. If parents waited to file a tax return, they would not receive the
advance monthly CTC payments. (Please see the section on the non-filer portal below to learn
more about our findings on parents’ usage of the non-filer portal to sign up for the CTC.)
Receipt of the Monthly CTC Payment
We found that a majority of parents, about 78 percent of those who filed a tax return in the past
two years, reported receiving the CTC monthly benefit at the time of the survey. Of those who had
reported claiming the CTC on their tax return in the past, 66 percent of respondents reported
receiving the monthly payments.
White respondents were likelier to report receiving the monthly payments compared to Hispanic
respondents (67 percent compared to 61 percent). Black respondents were also less likely to
report receiving them (62 percent), but this difference did not reach statistical significance. We
know from other research that public benefit receipt is underreported in surveys, and the actual
rate of monthly advance CTC receipt may have been higher than what was reported by survey
respondents. 12
Hispanic respondents were less likely to report that they claimed the CTC on their tax return in
prior years and were less likely to report getting the CTC monthly payments compared to white
and Black respondents. (See Figure 1.) This is consistent with findings from our national CTC
survey conducted in July 2021, when Hispanic respondents also were less likely to report claiming
the CTC on their taxes in prior years and were less likely to have received a stimulus payment. 13
Figure 1: Did you claim the Child Tax Credit when you filed
your tax return (in tax years 2019 or 2020)?
Percent of Parents Who
100%
76% 76% 73%
80% 64%
Claimed the CTC in their Tax
60%
40% 24% 19%
18% 17%
20%
Return
0%
White Respondents Black Respondents Hispanic Total Respondents
Respondents
Yes No / I Don’t Know
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6 The Expanded Child Tax Credit is Helping Families
A variety of factors could explain the disparity in access to the monthly CTC payments for the
Latinx community and in claiming the CTC on prior tax returns. A lack of Spanish-language
resources about the CTC, as well as a lack of community tax preparation organizations available
with Spanish-speaking staff, are potential factors. As a result of the anti-immigrant policies from
the Trump Administration, many immigrants are still afraid to apply for benefits or share
information with the government. 14 This “chilling effect” could make Latinx communities
reluctant to sign up to receive the CTC benefits, despite their eligibility for the credit.
These barriers are further amplified by the differentiation of rules by legality, extending eligibility
exclusions, benefit limitations, and administrative burdens not only to undocumented
immigrants, but also to lawful permanent residents and U.S. citizens in immigrant families. As an
example, the requirement for children to have a Social Security number (SSN) to be claimed for
the CTC was a rule enacted in 2017 by the Tax Cuts and Jobs Act. Prior to that year, a child with an
Individual Taxpayer Identification Number (ITIN) could be claimed as a qualifying child for CTC
purposes. Moreover, access to the federal EITC is prohibited for taxpayers with ITINs. This unequal
treatment of taxpayers across the tax system contributes to a form of structural discrimination for
mixed-immigration-status families in particular. 15
Differences in respondents’ income did not have a statistically significant impact on whether
people received the monthly CTC payments, or whether respondents claimed the CTC on prior
tax returns, except for the lowest income respondents (those with incomes under $10,000 per
year). Respondents with incomes under $10,000 per year were less likely to file a tax return in prior
years and less likely to report receiving the monthly CTC payments at the time of the survey. This
is not surprising given that respondents with the lowest incomes are not legally required to file a
tax return and therefore would be less likely to have been included in the IRS database.
When comparing the educational attainment of the respondents, those without a high school
diploma or a GED were least likely to have filed for the CTC in a prior tax return when compared to
respondents with higher educational attainment. This is consistent with findings from our July
2021 CTC survey. 16 These discrepancies based on educational attainment in claiming and
accessing the CTC point to the importance of creating more tax filing outreach resources in easy-
to-understand language. These resources should be tested among parents across a range of
educational backgrounds for understanding and clarity.
Average Monthly CTC Payment
The survey asked respondents receiving advance CTC payments how much their monthly
payment was in the prior month. The average monthly CTC payment received by respondents
was higher for those with the highest incomes in the survey sample pool ($50,000 - $74,999) than
it was for the lowest income respondents (those making under $10,000.) For the lowest income
respondents, the average monthly payment received was $464, compared to $520 for the
respondents with higher incomes. These differences are the result of more children residing in
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7 The Expanded Child Tax Credit is Helping Families
households with incomes between $50,000-$74,999. This may be due to parents in this higher
income bracket being older and having more children as a result.
The CTC is a per-child benefit. As such, families with more children receive larger benefits than
families with fewer children. Hispanic and white respondents reported receiving an average
higher monthly payment compared to Black parents, parents of other racial backgrounds, † and
parents of two or more races. Hispanic parents received an average of $505 per month in CTC
payments, compared to $483 for white parents, and only $436 for Black parents. (See Figure 2.)
These differences essentially disappear after taking into account the number of children in the
household.
Figure 2: Mean Monthly CTC Payment by Race of Parent
520
$505
Mean Monthly CTC Payment
500
$483
480
460 $452
$436 $433
440
420
400
White Black Other (non- Hispanic Two or more races
Hispanic)
Of Families that Didn’t Get Monthly CTC Payments,
Confusion and Opting Out are Main Drivers
Confusion about CTC eligibility rules was a large reason why respondents had not claimed the
CTC on a prior tax return and factored into respondents’ replies when asked why they were not
receiving monthly payments at the time of the survey. Survey respondents selected options from
a list of why they did not claim the CTC on prior tax returns. Those who had not received the
monthly payments could write in a response for why they believed they weren’t receiving it.
†
The Ipsos polling firm classified about 6 percent of all survey respondents as “other,” which includes Asian-
American respondents.
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8 The Expanded Child Tax Credit is Helping Families
Why Respondents Haven’t Filed for the CTC
The most common reason respondents had for not claiming the CTC on a previously filed tax
return was because they believed that they were not eligible for the credit. Other common
responses included that they did not know about the CTC and worries that they would have to
pay the money back to the government. These responses all emphasize the importance of
creating and distributing more CTC informational materials that specifically address those
common concerns, such as whether parents would be required to pay back the CTC payments
that they receive. It also shows that constantly changing tax policy can be difficult for families to
keep track of.
Some respondents also wrote in answers that their tax advisors had warned them to opt out of
receiving the monthly payments because there was a risk that they would have to pay back the
payment. This advice seemed misguided for many families with low incomes. The ARP created
safe harbors to protect low- and moderate-income parents from repaying errant payments that
had been made to them. 17 But a lack of awareness of this provision – including among tax
professionals – caused fear and confusion among parents and caregivers, resulting in some
ultimately opting out of the monthly payments. This response may have also stemmed from tax
preparers warning clients that they would receive a smaller lump-sum refund after getting the
advance payments.
“The IRS needs to verify my identity and they are impossible to
get a hold of. I feel completely cheated that I haven’t received
anything yet. Not fair!”
– Write-in response to question asking why the respondent believe they had not
received their monthly CTC payment yet
Why Respondents Believe They Haven’t Received the Monthly CTC
Payments
For the survey question asking respondents why they believed they were not receiving the
monthly CTC payments, the two most common answers that parents wrote in were: 1) They did
not know why they were not getting the monthly CTC payments, representing the confusion and
uncertainty about the eligibility rules for the CTC, and 2) they opted out of the monthly payments
because they preferred to get a lump-sum payment during tax time.
Some respondents who reported that they did not understand why they were not getting the
monthly payments said they had received the payments during some months but not others. This
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9 The Expanded Child Tax Credit is Helping Families
inconsistent delivery of the payments could be due to a reported glitch from the IRS in September
that caused a small share of families to not receive the payment that month. Our survey was
distributed in October, one month after up to 2 percent of CTC recipients faced a delay in
receiving their September monthly payment due to that IRS technical issue. 18
For respondents who said they had chosen to opt out of receiving monthly payments, some said
it was simply because they prefer to receive a lump-sum payment rather than getting the
payment monthly. Others reported being advised by tax advisors to opt out of the monthly
payment so they would not have to pay it back later. Common fears and misconceptions about
the CTC monthly payments that have been reported anecdotally and in focus groups include that
parents will be taxed on it, they will owe the money back later, or the payments will impact their
eligibility for means-tested public benefit programs. 19 These all could be deterring factors for
parents opting out of the monthly payments.
“I was advised not to in order to have a better return.”
– Write-in response for question asking respondent why they believe they had not
received their monthly CTC payment yet
Other reasons that respondents wrote in for why they believed they had not received the CTC
monthly payment at the time of the survey included:
• A delay in the IRS processing their tax return or in their return being submitted.
• The child’s other parent receives the CTC payment, or ongoing child custody conflicts.
• Believing they are not CTC-eligible and not signing up as a result.
• Needing identity verification through the IRS, delaying the receipt of payments.
• Their child turning 18 that year and therefore no longer being CTC-eligible.
• Owing money for past debts.
• Having the CTC payment sent to an incorrect address after moving.
The IRS Non-Filer Portal was Minimally Used and Hard to
Access
The IRS developed a website that families could use in 2021 to sign up for the monthly advance
CTC payments if they had not previously filed a tax return and if they had eligible children in their
household. The goal of the portal was to expedite and simplify the receipt of payments for the
households who have the greatest financial need and who are likely to be disconnected from the
tax system.
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10 The Expanded Child Tax Credit is Helping Families
Unfortunately, the IRS’s non-filer portal for parents included wonky language, was not mobile-
friendly, and required complicated verification steps for users. The portal also was not available in
any language other than English. (Code for America later developed a separate portal for non-
filers to file for CTC payments that was more user-friendly and accessible. 20) The national survey
asked about respondents’ experiences with the portal to gauge whether caregivers were aware of
the existence of the portal and whether they were able to successfully use it to sign up for their
monthly payments.
Successfully Using the CTC Non-Filer Portal
Only a very small subset of the survey pool – 26 respondents – reported successfully using the
non-filer portal to claim the CTC payments. In comparison, 57 respondents reported not filing a
tax return in the prior two years and would likely need to use the non-filer portal because the IRS
had no recent record of their information. Of those 26 respondents who used the portal, 21 said
they experienced difficulty applying for the payments online.
The non-filer portal closed when the monthly CTC payments ended in 2021, but if such a portal is
re-opened in the future, it must be simpler and more accessible. Ensuring the portal is mobile-
friendly, available in easy-to-understand language, has simplified documentation and verification
requirements, and is available in multiple languages is critical to ensuring that families with very
low incomes who usually do not file tax returns are able to use it to claim the CTC.
How Respondents Heard about the CTC Non-Filer Portal
The survey asked respondents who reported successfully claiming the CTC by applying for it
using the online CTC tool how they learned about the portal. The most common response was
learning about the portal from an IRS letter (36 percent of total respondents to the question),
from the TV or in the news (27 percent), or from social media, such as Facebook, Twitter,
Instagram, or TikTok (21 percent). Some respondents reported hearing about the portal from
friends or family members (10 percent), and fewer learned about the portal from community
groups, child care providers, or from schools (4 percent.)
How Families Report Spending their CTC Payments
The CTC provides families a cash payment to cover whatever costs best meets their family’s
needs. It can be spent however the family chooses. This differs from other public benefit
programs, like Supplemental Nutrition Assistance Program (SNAP), which can only be used
toward food costs in participating stores. This gives parents the agency to decide how best to use
their money to meet the needs of their families. Such a model is more empowering to recipients
and is ultimately more effective at serving the multi-faceted needs of families. 21 While these
payments have been a lifeline for families during the COVID-19 recession and uneven recovery,
many families were struggling even before the pandemic to make ends meet, living paycheck to
paycheck.
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11 The Expanded Child Tax Credit is Helping Families
Research from multiple sources, such as the U.S. Census Bureau Household Pulse Survey, have
found that the monthly CTC payments were being spent on necessities like food, child care, and
school supplies. 22, 23 The Center on Budget and Policy Priorities reports that over 90 percent of
families with incomes below $35,000 reported using the CTC to pay for necessities and education,
according to an analysis of Census Bureau data. 24
Our survey also found that parents are largely spending their CTC payments on necessities. The
most common response of how parents reported spending their payments in the October survey
was toward paying bills, followed by food and groceries and help with paying rent or mortgage.
Black, Hispanic, and white respondents all reported spending their monthly payments on
necessities. Black respondents were more likely to spend their CTC payment to pay bills, with
nearly one-quarter (24 percent) of respondents reporting that type of spending, compared to
white respondents (21 percent) and Hispanic respondents (18 percent). This could be due to the
various structural barriers – such as low wages, the racial wealth gap, and discrimination in home
ownership opportunities – that have prevented Black families from accumulating savings.
Hispanic respondents were likelier to report spending their CTC payments on food (20 percent)
compared to white and Black respondents (17 percent.) (See Figure 3).
In our July 2021 CTC survey, Black and Hispanic respondents were more likely to report planning
to spend their upcoming monthly CTC payments on bills, expenses, and utilities (31 percent and
28 percent respectively) compared to white respondents (17 percent.) White families were likelier
to report planning to save or invest the payments (22 percent), compared to Black and Hispanic
respondents (17 percent). 25
Figure 3: How Parents Spend CTC Monthly Payments --
Percentage Reporting Different Uses by Race
25 24%
Percentage of parents reporting use of CTC
21%
20%
20 18%
17% 17%
15
11% 11%
10%
10
5
0
Pay bills Rent or mortgage Food
Black Hispanic White
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12 The Expanded Child Tax Credit is Helping Families
There was not a significant difference in how parents reported spending the monthly CTC
payments based on the income of respondents. Spending the payments on necessities, such as
paying bills, rent and mortgage, and food, was the most common response regardless of the
income of the respondent. In the July survey, higher income respondents making between
$100,000 and $150,000 per year were more likely to report planning to save or invest their
upcoming monthly CTC payment (20 percent) compared to respondents making under $50,000
(13 percent). 26 The October survey only included respondents making under $75,000 per year.
During our in-depth phone interviews with selected respondents, many parents reported
spending their monthly CTC payments on essentials like household supplies, clothing for their
children, school costs, and car repairs. Some parents also reported putting the CTC payments
toward enrichment activities for their children, like a musical instrument for their child
participating in the marching band.
Given these findings, it’s clear that parents with low and moderate incomes will face economic
uncertainty now that the monthly CTC payments have expired. The expenses that the monthly
payments were largely going toward for these families – bills, rent or mortgage, and food – are
not annual expenses but, rather, costs that parents must cover monthly. And they are expenses
that remain essential for families to cover on an ongoing basis, even as the pandemic ends.
Allowing the CTC advance monthly payments to expire means parents will be forced to
reconfigure their budgets, go without meals, and allow bills to go unpaid or take out costly loans
to pay their upcoming bills.
“[The CTC] helps me out, getting my bills caught up, buying
essentials around the house. And for my boy, I’m buying him
jeans, t-shirts, a haircut. I don’t have a car, but pay [friends] for
gas money, which is going up.”
– Clarissa, Mother in Tennessee
Monthly Payments Improve Wellbeing of Parents
The survey asked parents how receiving the monthly CTC payments has impacted family
wellbeing and found that the payments are supporting parents and their children. Nearly 70
percent of respondents who received monthly payments said the payments made them a lot or a
little less stressed about money.
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13 The Expanded Child Tax Credit is Helping Families
Monthly CTC Payments Reducing Financial Stress
Respondents of color were likelier to say the monthly CTC payments reduced their financial stress,
compared to white respondents, in part given the correlation between race and household
income. (See Figure 4.) Hispanic respondents were more likely to say that the monthly payments
made them feel a lot less stressed about money (24 percent of respondents receiving monthly
payments), as were Black respondents (21 percent), compared to white respondents (16 percent).
For respondents of other races, 27 percent reported the monthly payments reduced their
financial stress a lot.
Over 7 in 10 Hispanic respondents who received monthly payments said getting them reduced
financial stress by either a lot or a little (72 percent). Two-thirds of Black respondents (67 percent)
said the same, compared to fewer white respondents (64 percent). The difference between
Hispanic and white respondents reached statistical significance. For respondents of other races,
over three-quarters (76 percent) reported the monthly payments reduced their financial stress by
a lot or a little.
Figure 4: Monthly CTC Payments' Impact on
Financial Stress, by Race
76%
80% 72%
67%
Percent of Respondents
70% 64%
60%
50%
36% 33%
40% 28%
30% 24%
20%
10%
0%
White Black Hispanic Other (Non-
Hispanic)
CTC Monthly Payments Reduced Stress
CTC Monthly Payments Don’t Reduce Stress
When reviewing the responses to this question, broken out by household income, respondents
with incomes under $50,000 said the payments reduced their stress at higher rates than sampled
respondents with the higher incomes ($50,000-$74,999). The income bracket in which
respondents were most likely to report that the monthly payments reduced their financial stress
was between $10,000 and $24,999. (See Figure 5.) It is possible that the CTC payments were not
large enough to reduce financial stress for the parents with the lowest incomes. Reducing stress
for parents has positive health benefits not just for the parent, but also for their children. Research
has found that reducing stress levels, especially for infants during times of critical brain
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14 The Expanded Child Tax Credit is Helping Families
development, can have positive impacts on their health, learning outcomes, and the home
environment for the child. 27
Figure 5: Monthly CTC Payments Impact on
Financial Stress, by Income
76%
80% 69% 67%
Percent of Respondents
64%
60%
33% 36%
40% 31%
24%
20%
0%
Less Than $10,000 $10k - $24,999 $25k to $49,999 $50k-$74,999
CTC Monthly Payments Reduced Stress CTC Monthly Payments Don’t Reduce Stress
Additional Ways the Monthly CTC Payments Support Family Wellbeing
The survey asked respondents whether receiving the additional money from the monthly
payments had altered their daily life in certain ways, such as being able to buy higher quality food
or allowing them to buy toys, gifts, or activities for their children. Respondents could select as
many options as applied to them. Below is the list of response options and the percent of
respondents who answered the question that selected each statement:
Do you feel the additional money from the Child Tax Credit has altered your daily life in any of
the following ways:
Has reduced my financial stress overall 38%
Allows me to buy toys, gifts, or activities for my child(ren) 19%
Has allowed me to buy more or higher quality food 17%
Freed up time that I can spend with my child(ren) 7%
Improved my relationship with spouse, friends, or family 5%
Helps me pursue my own education or training 2%
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15 The Expanded Child Tax Credit is Helping Families
Being able to afford more enrichment activities, toys, and gifts for children is an important
outcome of the monthly payments. This provides joy for the child and for the parent, as well as
opportunities for educational enrichment for the child during key stages of child development.
During a phone interview of a survey respondent, a mother of one child who lives in Missouri
discussed how she was spending the monthly CTC payments: largely toward bills, groceries,
home loan payments, and a couple of vehicle payments, as well as paying off the bank. But the
payment also provides her with a little extra cash to put directly toward her child. “It [the CTC
payment] gives us a little cash – she’s [her daughter] gonna have a pretty decent Christmas this
year.” Being able to provide additional holiday gifts for their children brings joy that benefits both
the child and parent.
Being able to afford higher quality food is critical for improving the health and wellbeing of
children and their parents. Nutritious foods like fruits and vegetables are often more expensive
than fast food or less nutritious snacks, especially for families living in regions with fewer
accessible grocery store options. With the additional income coming from the monthly CTC
payments, parents can afford to provide a wider variety in their child’s diet while reducing the
likelihood that the parent will have to skip meals to provide for the child. 28
Receiving the CTC payments can also reduce families’ reliance on charity for food, such as food
pantries and food banks. One parent wrote in the survey that receiving the monthly CTC payment
means no longer needing to rely on a food bank to get the food they need. This will save the
family time, energy, and stress, as well as give them access to a greater variety of foods of their
choice.
“Actually been able to buy food for my family versus having to go
to food banks.”
– Write-in response from parent when asked for additional ways that the CTC
monthly payment has altered their daily life
Being able to afford more food is especially important as inflation has increased the price of
groceries. Parents in phone interviews discussed the recent jump in monetary inflation and how it
has increased costs for essentials. Jason, a father of two children living in Wisconsin, explained
that “Groceries, gas prices are going up, and shoes and clothes as well.”
Hispanic respondents were more likely to report that the additional money helped with buying
more food and higher quality food (23 percent) compared to white and Black respondents (14
percent). Hispanic parents were also likelier to say the additional money freed up time that they
can spend with their children (11 percent) compared to white and Black parents (7 percent). Black
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16 The Expanded Child Tax Credit is Helping Families
parents were more likely to respond that the additional money from the CTC payments allowed
them to buy toys, gifts, or activities for their children (23 percent) compared to white respondents
(18 percent) and Hispanic respondents (17 percent).
When reviewing the responses based on income, we found no significant differences: responses
were essentially the same between households with lower incomes (incomes up to $49,999) and
higher incomes ($50,000 to $74,999).
CTC Monthly Payments and Engaging in Paid Work
The survey also asked respondents whether receiving the monthly payments made it easier to
engage in paid work or to work more hours. This question proved timely given concerns from
lawmakers that the monthly payments would disincentivize parents from working outside the
home. About one-quarter of all survey respondents receiving the monthly payments agreed that
the payments helped them work. Black respondents were twice as likely to say the monthly
payments helped them work compared to white respondents. (See Figure 6.)
During the phone interviews with respondents, parents commented how the monthly payments
helped them afford transportation to get to work and covered the cost of child care that allowed
them to work additional hours. One mom named Jasmin, who has two kids and lives in New
Jersey, explained how transportation costs take up a large portion of her monthly budget.
“Between Uber, the bus, and walking, I get to work; two miles away and six days a week. Often,
the buses don’t run on time. I can spend one paycheck each month just on transportation.” The
monthly CTC payments provided her with more resources to pay for the transportation to get to
and from her job.
Figure 6: CTC Monthly Payments Helping Parents Work More
(Percentage of respondents who received monthly payments)
Percent of Respondents w/ Monthly
45% 42%
40%
35%
30% 27%
25% 23%
20%
Payments Who Responded Yes
20%
15%
10%
5%
0%
White Respondents Black Respondents Hispanic All Respondents
Respondents Who Received
Monthly Payments
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17 The Expanded Child Tax Credit is Helping Families
Survey Respondents also Receive the EITC and CDCTC
Claiming the Earned Income Tax Credit
The federal Earned Income Tax Credit (EITC) is another important refundable tax credit that
supports low- and moderate-income families with children. The EITC is worth a maximum of
$6,728 in 2021 (for married couples with three or more eligible children). About 37 percent of
survey respondents overall reported claiming the EITC on their tax return in the past two years.
White respondents (39 percent) and Black respondents (51 percent) were more likely to have
reported claiming the EITC, compared to Hispanic respondents (29 percent).
Families with incomes between $25,000 and $49,999 were the most likely to report claiming the
EITC (44 percent). This is consistent with the income cutoff of $56,000 for married couples with
three or more children for the EITC in 2020. The EITC available for workers not claiming children
was expanded under the American Rescue Plan Act for tax year 2021. Filers with children may
claim this credit if their children do not count as qualifying children for the EITC, for example, if
they are claimed by another parent or do not have Social Security numbers.
The most common reason respondents reported for not claiming the EITC was believing they
were not eligible for the credit (11 percent of all survey respondents). Five percent of respondents
reported not knowing about the EITC as the reason for not claiming it.
Claiming the Child and Dependent Care Tax Credit
The federal Child and Dependent Care Tax Credit (CDCTC) helps families meet their work-related
child and dependent care expenses for children under age 13, or for dependents and spouses
with disabilities. Unfortunately, because the credit has been nonrefundable for most of its history,
families with little or no tax liability – who tend to be those with low or moderate incomes –
received little benefit from the credit prior to 2021.
About 29 percent of respondents overall reported claiming the CDCTC on their tax return in the
past two years. Black respondents (37 percent) were more likely to have reported claiming the
CDCTC on prior year tax returns than respondents overall and when compared to white or
Hispanic respondents (27 and 26 percent). Respondents with incomes between $25,000 and
$49,999 also were more likely to report having claimed this credit (32 percent). 29
The ARP expanded the CDCTC and made the credit refundable for tax year 2021. The CDCTC for
tax year 2021 is worth up to $4,000 for one child or dependent and up to $8,000 for two or more
children or dependents. Given the significant expansion of the credit for tax year 2021 and the
relatively low rates of claiming it among families who may have child or dependent care expenses
in this income range, it will be important for advocates and policymakers to provide information
and tax filing support to such families during the tax filing season for tax year 2021 returns. 30
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18 The Expanded Child Tax Credit is Helping Families
The most commonly reported reason for respondents not claiming the CDCTC was due to not
paying for any child care expenses during that year (23 percent of respondents). Seven percent of
respondents did not think they were eligible for the CDCTC, and 6 percent did not know about
the credit. It will also be essential for advocacy organizations, tax preparation clinics, and
government agencies to create more tax outreach resources that include information on the CTC,
EITC, and CDCTC in the 2021 tax season and after the season ends as more targeted outreach is
done for hard-to-reach populations.
Implications for the CTC
At the writing of this report, passage of an economic reconciliation package with investments in
families has stalled due to disagreements among U.S. Senators on which investments to include
in the final package. Disagreements also persist among lawmakers about how to structure an
extension of the expanded CTC in such a package and how long to extend the expansions.
It is critical that the CTC expansions continue beyond tax year 2021. As the survey results
demonstrate, the monthly payments have helped low- and moderate-income parents afford
necessities, reduced their financial stress, and enabled parents to work additional hours outside
the home. The increased monthly CTC payments also could help support parents in affording the
costs of rising goods as inflation increases the prices of necessities like groceries and gas. For the
parents with the lowest incomes, the additional money from the CTC helps them afford
necessities more easily. Through the phone interviews we conducted, we heard directly from
parents that the CTC monthly payments have made a huge difference in their budgets and their
ability to afford essentials and enrichment activities for their children. The monthly payments
therefore benefit children’s health and educational opportunities.
Now that the payments have expired, families with children have faced an immediate drop in
income, increasing poverty back to pre-CTC expansion levels. This leaves basic necessities out of
reach for some, especially for Black and Latinx children. 31 Parents will have to return to food banks
or skip meals to ensure their children can eat. Caregivers will lose the ability to afford
transportation to get to work. Children will lose access to enrichment activities like sports and
music that benefit their development. And rent will be left unpaid as bills continue despite the
expiration of the expanded monthly CTC benefit.
In the midst of working toward a permanent expansion of the CTC, community partners,
lawmakers, and Biden Administration officials must make sure that families who are eligible for
the CTC know to file a 2021 tax return, even if they have very low incomes and have traditionally
not filed a tax return. For those who received an advanced payment, this allows them to receive
the second half of the CTC. For those left out of the monthly payments, filing a tax return will
trigger receipt of the full CTC payment. This is especially important for the Latinx community, for
parents with the lowest incomes, for those without a high school diploma or GED, and for Puerto
Rican families that are newly eligible for the CTC in tax year 2021. Tax outreach materials should
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19 The Expanded Child Tax Credit is Helping Families
be centered in race equity. This includes developing materials that are in easy-to-understand
language, available in multiple languages, address concerns parents often have about receiving
the expanded credit, and include information about likely eligibility for the EITC and CDCTC. Our
tax system matters for racial equity, and we have an opportunity to drive an equitable economic
recovery that works for all of us.
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20 The Expanded Child Tax Credit is Helping Families
Endnotes
1
Internal Revenue Services, “IRS, Treasury announce families of 88 percent of children in the U.S. to automatically
receive monthly payment of refundable Child Tax Credit,” May 17, 2021, https://www.irs.gov/newsroom/irs-
treasury-announce-families-of-88-percent-of-children-in-the-us-to-automatically-receive-monthly-
payment-of-refundable-child-tax-credit.
2
Zachary Parolin, Sophie Collyer, and Megan A. Curran, “Sixth Child Tax Credit Payment Kept 3.7 Million Children
Out of Poverty in December,” Columbia University Center on Poverty and Social Policy, January 18, 2022,
https://www.povertycenter.columbia.edu/news-internal/monthly-poverty-december-2021.
3
Yiyu Chen and Dana Thomson, “Child Poverty Increased Nationally During COVID, Especially Among Latino and
Black Children,” Child Trends, June 3, 2021, https://www.childtrends.org/publications/child-poverty-
increased-nationally-during-covid-especially-among-latino-and-black-children.
4
“NWLC Analysis of U.S. Census Bureau COVID-19 Household Pulse Surveys,” National Women’s Law Center,
January 22, 2022, https://nwlc.org/resource/nwlc-analysis-of-u-s-census-bureau-covid-19-household-
pulse-surveys/.
5
Yiyu Chen and Dana Thomson, “Child Poverty Increased Nationally During COVID, Especially Among Latino and
Black Children,” Child Trends, June 3, 2021, https://www.childtrends.org/publications/child-poverty-
increased-nationally-during-covid-especially-among-latino-and-black-children.
6
Sophie Collyer, David Harris & Christopher Wimer, Center on Poverty and Social Policy at Columbia University,
“Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Tax Credit,” May 14, 2019,
https://www.povertycenter.columbia.edu/news-internal/leftoutofctc.
7
Internal Revenue Services, “IRS: Families now receiving October Child Tax Credit payments; still time for eligible
families to sign up for advance payments,” October 15, 2021, https://www.irs.gov/newsroom/irs-families-
now-receiving-october-child-tax-credit-payments-still-time-for-eligible-families-to-sign-up-for-advance-
payments.
8
National Women’s Law Center, “America’s Families and the Child Tax Credit: Results from National Survey, July
2021,” September 2021, https://nwlc.org/resources/memo-summarizing-key-findings-from-national-ctc-
poll/. The July CTC survey, also conducted in partnership with the Ipsos polling firm, polled 1,031 parents with
children under 18 years old in the household earning less than $150,000 per year.
9
Center for Law and Social Policy (CLASP), “Key Findings from National Child Tax Credit Survey: CTC Monthly
Payments are Helping Improve Family Well-Being,” November 2021,
https://www.clasp.org/publications/report/brief/key-findings-national-child-tax-credit-survey-ctc-
monthly-payments-are.
10
Kris Cox, Roxy Caines, Arloc Sherman, and Dottie Rosenbaum, “State and Local Child Tax Credit Outreach
Needed to Help Lift Hardest-to-Reach Children Out of Poverty,” Center on Budget and Policy Priorities, August 5,
2021, https://www.cbpp.org/research/federal-tax/state-and-local-child-tax-credit-outreach-needed-to-
help-lift-hardest-to-reach.
11
Internal Revenue Service, “2021 Child Tax Credit and Advance Child Tax Credit Payments – Topic I: U.S.
Territory Residents and Advance Child Tax Credit Payments,” updated March 8, 2022,
https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-
topic-i-us-territory-residents-and-advance-child-tax-credit-
payments#:~:text=A2.,pay%20U.S.%20social%20security%20taxes.
12
Michael Karpman, Elaine Maag, Genevieve M. Kenney, and Douglas A. Wissoker, “Who Has Received Advance
Child Tax Credit Payments, and How Were the Payments Used?” Urban Institute and Brookings Institution Tax
Policy Center, November 4, 2021, https://www.taxpolicycenter.org/publications/who-has-received-
advance-child-tax-credit-payments-and-how-were-payments-used.
13
National Women’s Law Center, “America’s Families and the Child Tax Credit: Results from a National Survey of
Eligible Parents,” September 2021, https://www.clasp.org/publications/report/brief/america-s-families-and-
child-tax-credit-results-national-survey-eligible.
14
Protecting Immigrant Families, “Immigrant Mixed Status Families Toplines Summary,” December 8, 2021,
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21 The Expanded Child Tax Credit is Helping Families
https://protectingimmigrantfamilies.org/wp-content/uploads/2021/12/PIF-Poll-Toplines-Memo-FINAL-1-
1.pdf.
15
Dolores Acevedo-Garcia, Pamela K. Joshi, Emily Ruskin, Abigail N. Walters et al., “Restoring An Inclusionary
Safety Net For Children In Immigrant Families: A Review Of Three Social Policies,” Health Affairs, Volume 40,
Number 7, July 2021, https://www.healthaffairs.org/doi/10.1377/hlthaff.2021.00206.
16
National Women’s Law Center, “America’s Families and the Child Tax Credit: Results from a National Survey of
Eligible Parents,” September 2021, https://www.clasp.org/publications/report/brief/america-s-families-and-
child-tax-credit-results-national-survey-eligible.
17
See Congressional Research Service, “The Expanded Child Tax Credit for 2021: Frequently Asked Questions
(FAQs), updated December 23, 2021, https://crsreports.congress.gov/product/pdf/R/R46900; to learn more
about the CTC safe harbor policy.
18
Internal Revenue Service, “IRS Statement – Advance Child Tax Credit Payments,” September 24, 2021,
https://www.irs.gov/newsroom/irs-statement-advance-child-tax-credit-payments.
19
Celinda Lake, Alysia Snell, Cate Gormley, Jenna Scarbrough, “Findings from Qualitative Research on the Child
Tax Credit,” Lake Research Partners, Partnership for America’s Children, Coalition on Human Needs,
https://www.chn.org/wp-content/uploads/2022/03/Findings-from-Focus-Groups-with-Non-Filers-and-
Service-Providers-about-the-Child-Tax-Credit.pdf.
20
Code for America, “Lessons from Simplified Filing in 2021,” January 2022,
https://files.codeforamerica.org/2022/01/07161314/lessons-from-simplified-filing-in-2021-getctc-report-
january-2022.pdf.
21
Urban Institute and U.S. Partnership on Mobility from Poverty, “A Universal Child Allowance to Reduce Poverty
and Improve Child Development,”
https://www.urban.org/sites/default/files/2016/11/22/presentation_slides_-
_a_universal_child_allowance_to_reduce_poverty_and_improve_child_development.pdf.
22
Daniel J. Perez-Lopez, “Household Pulse Survey Collected Responses Just Before and Just After the Arrival of
the First CTC Checks,” United States Census Bureau, August 11th 2021,
https://www.census.gov/library/stories/2021/08/economic-hardship-declined-in-households-with-
children-as-child-tax-credit-payments-arrived.html.
23
Daniel J. Perez-Lopez and Yerís Mayol-García, “Parents With Young Children Used Child Tax Credit Payments
for Child Care,” United States Census Bureau, October 26, 2021,
https://www.census.gov/library/stories/2021/10/nearly-a-third-of-parents-spent-child-tax-credit-on-
school-expenses.html.
24
Claire Zippel, “9 in 10 Families with Low Incomes Are Using Child Tax Credits to Pay for Necessities, Education,”
Center on Budget and Policy Priorities, October 21, 2021, https://www.cbpp.org/blog/9-in-10-families-with-
low-incomes-are-using-child-tax-credits-to-pay-for-necessities-education.
25
National Women’s Law Center, “America’s Families and the Child Tax Credit: Results from a National Survey of
Eligible Parents,” September 2021, https://www.clasp.org/publications/report/brief/america-s-families-and-
child-tax-credit-results-national-survey-eligible.
26
National Women’s Law Center, “America’s Families and the Child Tax Credit: Results from a National Survey of
Eligible Parents,” September 2021, https://www.clasp.org/publications/report/brief/america-s-families-and-
child-tax-credit-results-national-survey-eligible.
27
Carrie Masten, Joan Lombardi, and Philip Fisher, “Helping Families Meet Basic Needs Enables Parents to
Promote Children’s Healthy Growth, Development,” Center on Budget and Policy Priorities, October 28, 2021,
https://www.cbpp.org/research/poverty-and-inequality/helping-families-meet-basic-needs-enables-
parents-to-promote.
28
Zachary Parolin, Elizabeth Ananat, Sophie Collyer, Megan Curran et al., “The Initial Effects of the Expanded
Child Tax Credit on Material Hardship,” Center on Poverty and Social Policy, Columbia University, August 30,
2021,
https://static1.squarespace.com/static/5743308460b5e922a25a6dc7/t/61325c40d3bab90b2be87083/16
30690372639/Child-Tax-Credit-Expansion-on-Material-Hardship-CPSP-2021.pdf.
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22 The Expanded Child Tax Credit is Helping Families
29
Note that respondents with incomes under $50,000 reported claiming the CDCTC at higher rates
than estimated claims of the credit by households at these income levels. See, e.g., Congressional Research
Service, Child and Dependent Care Tax Benefits: How They Work and Who Receives Them (Feb.
2021), https://sgp.fas.org/crs/misc/R44993.pdf (estimating that households with incomes between $25,000
and $50,000 constituted 22% of returns claiming the CDCTC in 2018).
30
Urban Institute and Brookings Institution Tax Policy Center, “Tax Policy Ctr., T21-0047 – Tax Benefit of the Child
and Dependent Care Tax Credit (CDCTC) under Pre-American Rescue Plan Act Law, by Expanded Cash Income
Percentile, 2021,” March 23, 2021, https://www.taxpolicycenter.org/model-estimates/tax-benefits-
provisions-affecting-children-march-2021/t21-0047-tax-benefit-child-and; Urban Institute and Brookings
Institution Tax Policy Center, “Tax Policy Ctr., T21-0053 – Tax Benefit of the Child and Dependent Care Tax Credit,
by Expanded Cash Income Percentile, 2021,” March 23, 2021, https://www.taxpolicycenter.org/model-
estimates/tax-benefitsprovisions-affecting-children-march-2021/t21-0053-tax-benefit-child-and.
31
Zachary Parolin, Sophie Collyer, and Megan A. Curran, “Absence of Monthly Child Tax Credit Leads to 3.7
Million More Children in Poverty in January 2022,” Columbia University Center on Poverty and Social Policy, Volume
6, No. 2, February 17, 2022,
https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/620ec869096c78179c7c4d3c/164
5135978087/Monthly-poverty-January-CPSP-2022.pdf.
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