Blog Posts > 190,000 West Virginia Children Could Be Excluded from a Scaled Back Child Tax Credit
October 21, 2021

190,000 West Virginia Children Could Be Excluded from a Scaled Back Child Tax Credit

Earlier this week, it was reported that Senator Manchin was calling for a significant weakening of the enhanced Child Tax Credit (CTC) as part of his proposal to scale back the Build Back Better agenda. The enhanced CTC is one of the signature programs of the recovery agenda and is already making a significant impact in West Virginia.

As covered last week, slashing the budget reconciliation package from $3.5 trillion to $1.5 trillion over 10 years would support far fewer jobs and deliver far fewer benefits to lift up working families in West Virginia. In order to scale back the package this severely, it appears the expanded CTC may be compromised. Under the American Rescue Plan’s expansion, the CTC is nearly universal currently, reaching 93 percent of West Virginia children with an increased and fully refundable credit.

Senator Manchin is reportedly calling for a significant reduction in the size and scope of the CTC by demanding a strict work requirement and means testing in the form of a family income cap around $60,000 (lowered dramatically from the current cap of $150,000).

Reducing the family income cap to this extent would mean that tens of millions of children nationwide would miss out on the enhanced credit, with sizable losses falling on non-working parents who are disabled, students, and grandparents. In West Virginia, 190,000 fewer children would benefit from the CTC, a 57 percent reduction. Further, West Virginia families would miss out on $268 million in CTC benefits.

West Virginia has been one of the biggest beneficiaries of the enhanced CTC. West Virginia ranks 7th in the nation in terms of the boost in purchasing power the expanded CTC provides as a percentage of state GDP. The expanded CTC is also leading to historic reductions in poverty. Far from an “entitlement” that “discourages work,” the CTC expansion has empowered West Virginians by providing greater financial security to families and a boost to our struggling state economy.

If made permanent, the enhanced CTC will lift 43 percent of West Virginia children out of poverty, as well as build on its already well established long-term benefits regarding educational attainment, health, earnings, and work. West Virginia’s leaders should want to build on the expanded CTC’s success, and move to permanently cut poverty and improve opportunity in West Virginia by keeping the enhancements to the credit, not scaling them back.

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