About 120,000 New York City children moved out of poverty in 2021 due to a temporary expansion of a federal program put in place at the height of the pandemic, according to a report published Tuesday by the anti-poverty group Robin Hood Foundation in collaboration with Columbia University.
The Child Tax Credit, which helps parents offset the costs of raising children, was broadened in 2021 to include the poorest families, which didn’t initially qualify because they had no income or very little income.
“What we saw in this one-year experiment where people were less hungry, less stressed, which passed on to their children,” said Jason Cone, chief public policy officer for Robin Hood. “If you're less stressed as a parent, you're going to be able to be there for your kids.”
The program’s expansion also reduced the number of households that reported not having enough food and rely on food pantries by 21%, the report said.
The 2021 boost to the Child Tax Credit was part of the $1.9 trillion COVID-19 relief package Congress passed to help Americans cope with financial hardships after the government ordered businesses shut down in an effort to contain and slow the spread of the virus.
Under the expanded program, Congress raised the maximum credit from $2,000 to $3,000 per child aged 6 to 17 and $3,600 per child under age 6.
Congress also eliminated the earnings requirement. Before the temporary expansion, a family of four with two parents and two children needed to earn $36,000 a year to qualify for the full credit, according to the report. This means parents who didn’t work or who worked but didn’t earn enough income, weren’t eligible to receive the full or partial credit.
In New York City, 68% of children living in 15th Congressional District, which covers portions of the West and South Bronx, were not eligible for the full credit because their families’ earnings were not high enough to qualify for the tax credit, according to the report. In the 13th Congressional District, which includes Upper Manhattan and parts of the West Bronx, 58% of the children were not eligible.
“Thus this income boost failed to reach those families who would benefit from it the most,” the report said.
The expanded tax credit not only succeeded at reducing child poverty in New York City, but also nationwide. The temporary credit lifted nearly 4 million children out of poverty across the country, according to the report.
The measure’s supporters had hoped that Congress would continue to fund it, but in January 2022, Republicans and Democratic Sen. Joe Manchin refused to extend the program.
The total annual costs of the child tax credit program and its temporary expansion came to $118 billion a year, Cone said. But the money generated a lot more gain.
“For every dollar that the country spent funding this child tax credit expansion, the long-term benefits recurrent about $8 of benefits,” Cone said.
Gov. Kathy Hochul, who has pledged to cut child poverty 50% by the end of the decade, could do her part to cut child poverty in the state by fixing the Empire State Child Credit to include children under 4 for the poorest families, according to Robin Hood.
“That credit mimics some of the same flaws of the federal credit, meaning that it leaves out the lowest income families, and for odd reasons, leaves out children under four,” said Cone.
Such a program, he said, would cost the state about $229 million and lift 5,000 children out of poverty immediately. The amount is less than the $280 million tax credit the governor proposed to give to the film industry in her current budget.
Spokespeople for Hochul did not respond to a request for comment.