Recent data from the United States Census Bureau’s Household Pulse Survey shows a significant decrease in food insufficiency immediately after households received the first advanced payment of the newly expanded Child Tax Credit (CTC), with the largest decline in hunger being among households with children.
While the data is already showing the immediate benefits of increasing cash supports to families that can be used to pay for their individualized needs, some eligible West Virginia families are missing out on the tax credits to which they are entitled. With targeted effort and investments from state and local governments utilizing American Rescue Plan Act (ARPA) funds, West Virginia communities can build on the household and statewide economic impacts of the expanded CTC by ensuring that all eligible families are aware of and have the support they need to receive the payments.
Initial data from the Household Pulse Survey shows West Virginians spending their CTC payments on household essentials, with food being at the top of the list, followed by utilities, clothing, and paying down debt. West Virginia’s economy continues to face changes and challenges due to ongoing pandemic impacts, with overall employment still down 27,400 jobs (3.8 percent) between February 2020 and July 2021. But the expanded CTC is quickly proving to have immediate positive benefits for families, including ensuring that they have the resources they need to balance work and life responsibilities amid the ongoing pandemic.
Prior to the ARPA’s expansion of the Child Tax Credit, millions of low-income children, including 170,000 West Virginia kids (Appendix Table 1), were left out of the full benefit due to its regressive structure. The ARPA made three significant, but currently temporary changes to the CTC: 1) it increased the overall benefit from $2,000 per child to $3,000 per child for children aged 6-17, and to $3,600 for children under 6; 2) it allowed families to receive payments monthly so that they can utilize the benefit in real time to cover child-related costs rather than receiving the full benefit at tax time; and 3) it made the full benefit available to those who need it most — very low-income families. The expanded refundability provision ensures that these families — disproportionately Black, brown, and from rural communities — can receive the full amount of the credit, providing a crucial boost in household incomes to our country’s most vulnerable families. If all West Virginia children who are eligible are able to access the CTC, 346,000 children will benefit statewide, including 50,000 who would be lifted above or closer to the federal poverty line.
The ARPA’s primary intention was to direct much-needed federal relief to the communities most impacted by the pandemic. To help work toward that goal and to bolster local economies, West Virginia state and local governments could consider conducting outreach to ensure that those who qualify for the expanded CTC, as well as other family supports under the ARPA, are aware of these programs and are able to successfully file to receive the benefits they are eligible for.
Many families who qualify for the payments under the newly expanded CTC will have the payments automatically deposited into their bank accounts because they have filed taxes with the Internal Revenue Service in 2019 or 2020. However, for families with very low-incomes who are not required to file taxes, extra steps are required to file for the CTC payments.
In addition to conducting public education campaigns, officials can utilize the ARPA funds to hire navigators that guide families through the process of claiming the CTC via the IRS non-filer tool. Under U.S. Department of the Treasury guidance outlining eligible expenditures for ARPA state and local fiscal recovery funds, governments can conduct public awareness and outreach campaigns about ARPA’s family support benefits to hard-to-reach communities. These campaigns could involve hiring “benefit navigators” to conduct outreach and help families apply for expanded Earned Income Tax Credits, SNAP benefits, Medicaid, rental assistance, and other public programs designed to address the impacts of the pandemic.
Without further action from Congress, the groundbreaking economic security impacts of the expanded CTC will expire at the end of 2021. Fortunately, Congress is expected to consider a multi-year extension of these benefits as part of the “Build Back Better” recovery package, which would also provide much-needed family and worker supports such as additional investments in child care, paid family and medical leave, and expansions of health care benefits and supports for the home- and community-based services workforce.
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