New Data Show That the Child Tax Credit Fueled a Substantial Reduction in Child Poverty

New­ly released data from the U.S. Cen­sus Bureau reveal a major pub­lic pol­i­cy suc­cess. The nation’s child pover­ty rate dropped by half in 2021, from an esti­mat­ed 10% in 2020 to a his­toric low of 5%. This was pri­mar­i­ly thanks to the expand­ed child tax cred­it, accord­ing to the Sup­ple­men­tal Pover­ty Mea­sure (SPM).

While the Cen­sus Bureau updates the SPM and the offi­cial pover­ty mea­sure each year, the Annie E. Casey Foun­da­tion is an advo­cate for using the SPM as it accounts for a broad­er range of fam­i­ly resources such as:

• non­cash ben­e­fits (e.g., food and hous­ing assistance);
• stim­u­lus pay­ments; and
• tax cred­its.

It also fac­tors in nec­es­sary house­hold expens­es and region­al vari­a­tion in cost of liv­ing.

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Source: Annie E. Casey Foundation