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Joint Economic Committee Democrats Chairman - Senator Martin Heinrich (D-NM)

Work Requirements for the CTC Would Increase Financial Hardship and Childhood Poverty, While Doing Nothing to Boost Employment

Key Points:
“Work requirements” are a misnomer for a policy that imposes significant burdens on people and fails to increase employment
New restrictions on the CTC under the guise of a work requirement would reverse the CTC’s reduction in childhood poverty
New restrictions would deny the CTC to some of the most vulnerable families
Work requirements would increase racial and geographic disparities
The expanded CTC improves the lives of millions of children and promotes long-term prosperity

The American Rescue Plan (ARP) dramatically increased the value of the Child Tax Credit (CTC), from $2,000 per child to up to $3,600 per child under age 6 and $3,000 per child aged 6-17. The ARP also expanded the CTC so that it is now fully refundable, and previously ineligible low-income families will receive the full credit. Half of the expanded CTC is being distributed in advance via monthly payments, helping families meet their financial needs in real time. The Treasury Department has delivered $61 billion to families across the country thus far.

The expanded CTC is expected to reduce childhood poverty by over 40%. Early evidence shows that the advance CTC payments have reduced food insufficiency and financial hardship. Children succeed when they have adequate nutrition, stable housing and the things they need to learn at school. The expanded CTC provides a crucial lift to millions of working families to meet these needs.

There is no evidence that imposing so-called “work requirements” on CTC recipients would increase work. What the breadth of evidence does show is that imposing new restrictions would cut off vulnerable families, raise childhood poverty and increase racial disparities, hurting the children most in need of support.

Read the full brief here.