Updated Dec 12, 2021 - Politics & Policy

The states with their own child tax credits

Data: NCSL; Map: Kavya Beheraj/Axios

The federal child tax credit that's been providing families $3,000 to $3,600 per child since March is set to expire on Jan. 1, but some Americans will continue receiving checks through state programs spreading across the country.

Why it matters: Seven states already have their own child tax credits, and nine have introduced legislation to add them since 2019. Like the expiring federal program, they're part of a nationwide effort to alleviate child poverty.

  • The loss of the expanded federal credit would not only affect residents in the 16 states with or considering them.
  • It also would eliminate a payment residents in the other states have used as a bridge amid economic fallout from the coronavirus pandemic.

Driving the news: The state programs have varying eligibility requirements and provide between $100 to more than $1,000 per child through refund payments or state income tax credits.

  • States have made those payments on top of the federal monthly checks.
  • Four of the seven states have made the program refundable, meaning families who owe little or no federal tax — and, thus, have no deductions to claim — are issued a check for the full amount.
  • California and New York have both introduced legislation to expand their current state child tax credits.

What we're watching: In Oklahoma, over 800,000 children qualified for the expanded federal program.

  • The state child tax credit program, restored two years ago, allows families earning less than $100,000 per year to claim up to $1,000 per child, depending on income.
  • "If the federal government falls short on this program, the burden falls on the states," Joe Dorman, a former state representative and director of the Oklahoma Institute for Child Advocacy, told Axios. "And state lawmakers will have to determine if they can provide additional benefits."

The $1.75 trillion Build Back Better agenda includes a one-year expansion of the child tax credit, as well as permanent refundability.

If Congress fails to extend it, advocates say, more than 9 million kids are at risk of falling below the poverty line or deeper.

  • The last checks from the IRS are scheduled to be sent out to 35 million families next Wednesday.
  • Sen. Joe Manchin (D-W.Va.), who's concerned the Build Back Better bill would worsen inflation, has not yet committed to voting for the child tax credit as it's currently laid out. He's also in no rush to move the bill.

What they're saying: "Almost every Democrat in both the House and the Senate was in favor of a permanent or long-term expansion of the child tax credit, but the support of almost every Democrat is not hardly enough in the times we live in," Rep. Ritchie Torres (D-N.Y.) told Axios.

  • "House Democrats will not allow this tax credit to expire, and I don't believe the Senate will, either," Rep. Hakeem Jeffries (D-N.Y.) said Wednesday.
  • Republicans by and large have not supported the payments, with Senate Majority Leader Mitch McConnell calling them "monthly welfare deposits."

Flashback: The child tax credit was expanded in this year's $2.2 trillion coronavirus relief package to $3,600 from $2,000 for children under 6, and to $3,000 for children between 6 and 18.

  • A September study by the National Bureau of Economic Research found that payments were associated with a 7.5% decline in food insufficiency.
  • In previous months, Democrats were more ambitious, with the Biden administration proposing to extend, the enhanced credit through 2025 and others pushing for it to be made permanent.

Editor's note: This story was first published on Dec. 9.

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