Child Tax Credits a Huge Boost for Many, But Not All, Latino Families

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The expanded child tax credits are working to help families make ends meet and experience less stress, a new survey shows.

As part of the American Rescue Plan, Congress expanded the child tax credit in March 2021. Since July, the IRS has been providing cash benefits to most households with children, including some of the country’s poorest families.

Now, given sufficient time to study this effort, a survey by the Center for Law and Social Policy found that the enhanced child tax credit made a difference for many parents and children. Many Latinos and other families of color benefitted, but many immigrants also were left out.

“Consistent and broad evidence [shows] that this policy is working as intended,” Zach Parolin, who has studied the tax credit at Columbia University’s Center on Poverty and Social Policy, told Chalkbeat. “There’s some strong evidence from the past that these types of income boosts will be beneficial for students at increasing their learning potential.”

Update 1/4/21: The expansion of the existing child tax credit is ending amid a Congressional stand off, according to The New York Times.

What is the Expanded Child Tax Credit?

In March 2021, the Biden administration passed the American Rescue Plan — a nearly $2 trillion stimulus bill with economic relief to families hurting from the COVID-19 pandemic.

An enhanced tax credit for families with children was a part of the plan.

In previous years, the child tax credit was $2,000 per child, meaning that families could subtract $2,000 for each child from what they owed in income taxes (i.e., subtract $4,000 for two children, $6,000 for three children, etc.).

With the expanded child tax credit, families will receive more money.

“For 2021, the maximum credit is $3,600 for children younger than age 6 and $3,000 for those between 6 and 17,” writes Carmen Reinicke, according to CNBC.

There was no limit on the number of children you can have to receive the credit. Whether you receive the full expanded tax credit or the amount from previous years depends on your household’s income.

“Expanding access to a direct-payment program such as the [child tax credit] especially benefited Black and Latino households, who, on average, have substantially less in cash reserves than white families,” according to American Progress.

What Did the Survey Find Out about the Impact of the Expanded Child Tax Credit?

The Center for Law and Social Policy survey found that the expanded child tax credit improved parents’ lives.

Most importantly, parents reported that the monthly child tax credit payments have:

• Reduced financial stress
• Helped them to afford necessities
• Work more hours outside of the home

Only 6.4% of survey respondents said they would use the direct payments to cut down their working hours, according to the survey—which interviewed a nationally representative group of more than 1,500 parents (30% Latino) who were deemed eligible for the Child Tax Credits before the first monthly payment in July.

Overall, 66% of parents with incomes below $75,000 reported receiving monthly child tax credit.

However, Latinos (61%) and Blacks (62%) were among those least likely to claim the credit.

“The most commonly reported reason [for not claiming the child tax credit] was not believing they were eligible. Among those filing taxes, Hispanic respondents were less likely to have claimed the [child tax credit] on their tax return (64 percent among tax filers), compared with white and Black respondents  (76 percent among tax filers),” according to the survey.

This kind of social program can make life easier and give parents the opportunity to provide a better life for their children — something that help improve a child’s social determinants of health and overall health outcomes.

Survey respondents said they mostly used the expanded child tax credit refund or monthly payments for paying bills, food and groceries, paying their rent or mortgage, buying clothing and shoes, and paying down credit cards or other debt.

“The monthly payments make it easier for parents to budget for financial emergencies that can come up throughout the year,” Ashley Burnside, a policy analyst for the Center for Law and Social Policy, told the Washington Post. “It makes it easier for them to afford expenses as they come up, and it’s something that they can rely on as they budget.”

How Does the Expanded Child Tax Credit Affect Latinos?

Latino families tend to have less cash savings than white families, which can make a dramatic difference in economically turbulent years like 2020 and 2021.

The expanded child tax credit aimed to help.

“Low-income families suffer from income volatility,” said Elaine Maag, the principal research associate at the Urban Institute, according to NBC. “Delivering the credit in advance is trying to take the edge off those income fluctuations, which should help families meet their needs.”

However, the expanded child tax credit will only go to families with children who have social security numbers.

This means that Latino immigrant families may not receive the credit.

It’s important to note that undocumented families who have children with social security numbers can receive the tax credit without worrying about how it will affect their immigration status.

“Receiving the [child tax credit] or other tax credits that you are eligible for will not affect your immigration status, your ability to get a green card, or your future immigration plans. Use of tax credits is not considered in a ‘public charge’ determination by U.S. Citizenship and Immigration Services,” according to the Center for Law and Social Policy.

In the end, the expanded child tax credit is expected to lift over 4 million Latino children above or closer to the poverty line, and improve education, predicts the Center on Budget and Policy Priorities.

“[Pandemic learning loss] will probably be greatest among low-income, black, and Hispanic students …These are exactly the children the Biden proposal would help the most. Providing additional income through such a policy boosts not only children’s school performance but also their life prospects, rigorous research shows,” according to the report.

What Can I Do to Help Latino Families?

You can also play a role in advocating for systemic change.

Select your county name and get a Health Equity Report Card by Salud America!

You will see how your area stacks up in access to health care, housing, transit, and other health equity issues. These compare to the rest of your state and nation.

You can email your Health Equity Report Card to local leaders, or share it on social media. Use it to make a case for community change to boost health equity.

Get your Health Equity Report Card!