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Tools & Resources

A North Carolina Child Tax Credit would help every child thrive

June 08, 2022
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A Child Tax Credit has proven to be an effective tool in supporting the financial well-being of families and the healthy development of children.

A CHILD TAX CREDIT WOULD: 

  • Provide $50 to $250 annually depending on income and regardless of whether they owe income taxes.
  • Improve economic equity for families of color and women.
  • Increase the fairness in our tax code.

BENEFITS:

  • Improvements in infant and maternal health.1Waxman, Samantha, Arloc Sherman, and Kris Cox. “Income Support Associated with Improved Health Outcomes for Children, Many Studies Show: Refundable Tax Credits Among Programs That Boost Income.” Center on Budget & Policy Priorities, May 27, 2021. https://www.cbpp.org/research/federal-tax/income-support-associated-with-improved-health-outcomes-for-children-many.
  • Decreased poverty.2Hardy, Bradley L. “Child Tax Credit Has a Critical Role in Helping Families Maintain Economic Stability.” Center on Budget and Policy Priorities, April 14, 2022. https://www.cbpp.org/research/federal-tax/child-tax-credit-has-a-critical-role-in-helping-families-maintain-economic.
  • Reduced childhood hunger.3Harris, Logan. “Expanded Child Tax Credit Has Caused Big Reductions in Childhood Poverty, but More Action Is Needed.” The Pulse (blog), September 23, 2021. https://pulse.ncpolicywatch.org/2021/09/23/expanded-child-tax-credit-has-caused-big-reductions-in-childhood-poverty-but-more-action-is-needed/#sthash.eNNwETG0.5I9bcEdt.dpbs.
  • Better test scores and higher graduation rates.4Duncan, Greg J., and Katherine Magnuson. “The Long Reach of Child Poverty.” Pathways, no. Winter 2011 (n.d.): 23–27. https://inequality.stanford.edu/sites/default/files/media/_media/pdf/pathways/winter_2011/PathwaysWinter11_Duncan.pdf
  • More earning power as adults.5Chetty, Raj, John N. Friedman, and Jonah Rockoff. “New Evidence on the Long Term Impacts of Tax Credits.” Internal Revenue Service, November 2011. https://www.irs.gov/pub/irs-soi/11rpchettyfriedmanrockoff.pdf.

WHY NOW?

  • 20% percent of children in North Carolina live in poverty.6Nichol, Gene, and Heather Hunt. “The Persistent and Pervasive Challenge of Child Poverty and Hunger in North Carolina.” NC Poverty Research Fund, December 2021. https://law.unc.edu/wp-content/uploads/2021/12/NC-child-poverty_final-web.pdf.
  • 40% of households with children report that it was somewhat or very difficult to pay for usual household expenses during the last week.
  • 15% of households with children report that they sometimes or often don’t have enough to eat, compared with 11% in fall 2021 when families were receiving advance Child Tax Credit payments.
  • North Carolina anticipates receiving at least $2 billion in revenue that is yet unappropriated over the next two years.

The advance federal Child Tax Credit expanded eligibility over the past year but ended in 2021. The credits were used to purchase basic necessities such as food and housing and to pay off debt. North Carolina must now step up to make sure that families with children aren’t struggling to meet the basics. When we join together to make sure that every child has what they need to reach their full potential, our communities will thrive.

Footnotes

  • 1
    Waxman, Samantha, Arloc Sherman, and Kris Cox. “Income Support Associated with Improved Health Outcomes for Children, Many Studies Show: Refundable Tax Credits Among Programs That Boost Income.” Center on Budget & Policy Priorities, May 27, 2021. https://www.cbpp.org/research/federal-tax/income-support-associated-with-improved-health-outcomes-for-children-many.
  • 2
    Hardy, Bradley L. “Child Tax Credit Has a Critical Role in Helping Families Maintain Economic Stability.” Center on Budget and Policy Priorities, April 14, 2022. https://www.cbpp.org/research/federal-tax/child-tax-credit-has-a-critical-role-in-helping-families-maintain-economic.
  • 3
    Harris, Logan. “Expanded Child Tax Credit Has Caused Big Reductions in Childhood Poverty, but More Action Is Needed.” The Pulse (blog), September 23, 2021. https://pulse.ncpolicywatch.org/2021/09/23/expanded-child-tax-credit-has-caused-big-reductions-in-childhood-poverty-but-more-action-is-needed/#sthash.eNNwETG0.5I9bcEdt.dpbs.
  • 4
    Duncan, Greg J., and Katherine Magnuson. “The Long Reach of Child Poverty.” Pathways, no. Winter 2011 (n.d.): 23–27. https://inequality.stanford.edu/sites/default/files/media/_media/pdf/pathways/winter_2011/PathwaysWinter11_Duncan.pdf
  • 5
    Chetty, Raj, John N. Friedman, and Jonah Rockoff. “New Evidence on the Long Term Impacts of Tax Credits.” Internal Revenue Service, November 2011. https://www.irs.gov/pub/irs-soi/11rpchettyfriedmanrockoff.pdf.
  • 6
    Nichol, Gene, and Heather Hunt. “The Persistent and Pervasive Challenge of Child Poverty and Hunger in North Carolina.” NC Poverty Research Fund, December 2021. https://law.unc.edu/wp-content/uploads/2021/12/NC-child-poverty_final-web.pdf.