The Child Tax Credit Gap: A Snapshot of Families Left OutPoverty & Family Economics Tax Policy
Currently, many working families are excluded, either in part or entirely, from the benefits of the CTC. This is because, the credit is only available to tax payers who earn above a certain “”income floor.”” Parents with incomes only slightly above this floor can only claim a portion of the credit, not the full benefit. Additionally, the “”income floor”” is indexed to inflation and rises every year. Because wages at the low end of the income spectrum rarely keep up with inflation, many of the families who clamed the credit one year end up ineligible for the credit the next.
Who are the families currently being left out?
The brief finds that of parents making between $8,500 and $12,000 a year:
- 41% have a child under the age of 6 years old
- 54% work more than 40 weeks out of the year
- 47% work more than 30 hours each week
- 9% are students, 90% of whom are working towards a higher education degree