Direct child allowances, money sent to parents, are arguably the single-most impactful policy for preventing child poverty and all of its long-term problems. Direct child allowances benefit the very young in similar way that Social Security benefits the elderly. The 2021 expanded Federal Child Tax Credit gave us a great case study. It provided evidence of the positive impacts that a broad-based, flexible child tax benefit can have on family wellbeing. Minnesota has an opportunity to build on the success of the expired federal credit by child tax credit of our own.
A Minnesota child tax credit of $1800 (roughly half of the 2021 expanded federal credit) per child would provide $3600 in annual economic provision for both single and two parent households with two children.
The parents we have spoken with point to the impact that the 2021 American Rescue Plan’s one-year federal Child Tax Credit (CTC) expansion had on their wellbeing. The anecdotal impact on families was also backed by data and empirical evidence. In December 2021, when most families had received half of their child tax credit through advance monthly payments, an estimated 3.7 million American children had been elevated out of poverty (using a monthly poverty measure), a 29 percent reduction that was reversed the following month after the monthly payments expired.
Only 9 other states have enacted a state-level child tax credit. This overview from the National Conference of State Legislatures provides comparison details of what those other states are currently doing: https://www.ncsl.org/research/human-services/child-tax-credit-overview.aspx
A child tax credit would provide targeted relief to the Minnesotan’s who need it the most because parents raising minor children are bearing the brunt of the economic strain caused by the skyrocketing costs of food, energy (gas), and basic consumer goods
Do you like this page?