Jemal Countess / Getty Images for Community Change
Last year, Congress walked away from what looked like one of the most effective fixes for child poverty in a generation. Now, state legislators are trying to walk it back. Lawmakers in at least 10 states are considering some new version of the expanded child tax credit, a federal program that lifted millions of children out of poverty but was then abandoned by Congress. During 2021, parents received up to $300 monthly for each child, and it eased financial pressure on families while dramatically reducing child poverty.
Child tax credits are on the table in many states
States organized by child tax credit status
| Governor or legislator interested in creating a new program |
|---|
| Arizona, Connecticut, Hawaii, Illinois, Maryland, Minnesota, Missouri, Montana, Nebraska, Oregon |
| Expansion of pre-existing program possible this year |
| Colorado, Massachusetts, New Jersey, New Mexico |
| Has pre-existing program but no expansion on the table |
| California, Idaho, Maine, New York, Oklahoma, Vermont |
But reviving the program on the state level is divisive — as in Congress, lawmakers are split over how generous to make the payments, and who should be eligible. Each state will make its own decision, and the politics are not straightforward.
Politicians and advocates initially thought that giving all parents a cash benefit would be as popular as a program like Social Security, according to Andrea Campbell, a political science professor at MIT who studies the politics of taxes. But instead, it’s been compared to welfare by conservative politicians and activists, putting it in more difficult political terrain. “Aging is inevitable — it will happen to everyone,” Campbell said. “But having children is seen as a choice and not necessarily something that our government is responsible for supporting.”
State-level politicians, who are proposing all kinds of tax cuts and rebates for their constituents this year, have plenty of incentives to try where Congress failed. The expanded child tax credit was fairly popular overall, and parents were especially excited about it. According to a Morning Consult poll conducted in July 2022, 59 percent of Americans supported bringing back the monthly payments of up to $300 — including 75 percent of parents with children under the age of 18. Aidan Davis, state policy director at the left-leaning Institute on Taxation and Economic Policy, said that Congress’s inaction on the federal child tax credit created an opening for state legislators to implement a policy that’s both popular and effective — something that seems kind of like political gold. That might explain why a similar version has bipartisan support even in deep-red Montana, where Republican Gov. Greg Gianforte included a $1,200 annual child tax credit as part of his state budget proposal.
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“[The federal expanded child tax credit] had a large and immediate impact on child poverty, and people really liked it,” Davis said. “So given that Congress doesn’t seem likely to renew it, it makes sense that there’s more momentum for states to push for something similar within their own borders.”
But the idea of giving no-string-attached money to a huge group of Americans is still politically tricky. Even though the expanded child tax credit had broad support, Americans weren’t all that grateful for it — at least politically. Polling from Morning Consult throughout 2022 shows that while Democrats, who controlled Congress when the policy was passed, managed to gain an edge among child tax credit recipients shortly before the November midterms, many of the voters who received the payments were still supporting Republicans: According to the poll conducted close to the election, 51 percent of child tax credit recipients were planning to vote for Democrats in the midterms (compared to 46 percent of voters overall), while 40 percent of child tax credit recipients were planning to vote for Republicans (compared to 43 percent of all voters).
Perhaps that dissonance can explain why many of the proposed state-level credits are more limited than the federal version. Under the lapsed child tax credit expansion, most families were receiving between $250 and $300 per child every month. Many states are considering more modest payments, sometimes with income caps that would reduce the number of families who qualify.
New states that pass a child tax credit will join a small group that have already made this a priority. According to ITEP, ten states currently have a tax credit for children, including three states that implemented the program just last year. It’s still early in the legislative session, so there’s plenty of room for things to shift, but right now ten additional states are considering a child tax credit — plus lawmakers in Massachusetts, New Mexico, Colorado and New Jersey are discussing expanding their existing credit.
Not all tax credits are created equal, though. There are already big differences between some of the child tax credits that are already on the books — for example, three states have a tax credit for children that is nonrefundable, which means families without taxable income can’t receive the credit as a refund, which prevents many low-income families from benefiting. (Proponents want it set up this way to ensure the payments go to people who are working, though evidence suggests that child tax credits have a bigger impact on child poverty when the poorest families receive them.) Some are much more generous than others — Oklahoma’s nonrefundable child tax credit is $100 per child annually, while Vermont’s is $1000 per child and fully refundable. Some states only provide the credit to children under six, and others have income caps for eligibility.
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The child tax credits that have been floated this year also vary in their inclusivity and generosity. Montana’s governor-backed child tax credit is $1,200 per child under six — much higher than what most states offer — but it would only be available in full to families with an income of $50,000 or less. Massachusetts’s newly-elected governor, meanwhile, has promised to increase the state’s child tax credit to $600 per child under 13, without any income limitations.
Those differences are wonky, but they do have an impact on how far-reaching and effective the policy can be. According to Davis, it’s especially important to make sure that children under six are covered since there’s evidence suggesting that they benefit the most from a child tax credit. Excluding middle-income and affluent families would mean fewer people would qualify, but the impact on poverty reduction could still be big, according to experts. Legislators have to work out those tradeoffs — for example, do they want to include fewer people, but give out bigger payments, or include more people and give out smaller payments?
The fact that so many legislators and governors are still talking about child tax credits is a sign that Congress’s inaction hasn’t made them politically toxic. And although most of the efforts to institute or expand child tax credits are happening in blue states, it’s occasionally a bipartisan affair. Rose Bender, research director at the Montana Budget & Policy Center, told me that Gianforte’s office has been stressing the need for more aid to families. “The message is, ‘Kids are expensive and costs are rising,’” she said.
Campbell said that people might also be more open to tax credits that are designed for the specific needs of their state, noting that federal taxes tend to draw a lot more ire than state taxes. “People may perceive that residents of this state are more like [them],” she said. And the varying nature of the different states’ credits could be a bonus, too — proving to voters that this isn’t a one-size-fits-all program.
The fate of this year’s batch of proposed child tax credits — whether they move forward, if they’re watered down, whether they ultimately pass — will be consequential for millions of families around the country. But it’s also a second chance for politicians to test whether this is a strategy that voters will actually reward them for. Many Americans have a deeply ingrained suspicion of government handouts for low-income people — often influenced by negative, sometimes racist stereotypes about poor people and single mothers. Some lawmakers decried the federal expanded child tax credit as an expensive welfare program, and as Alex Samuels and Neil Lewis Jr. wrote for FiveThirtyEight last year, antipathy toward the people who most need government assistance shapes the way both Democrats and Republicans think about the social safety net.
But child care costs are rising, kids are expensive, and some politicians — including conservative Republicans like Gianforte — clearly think that building aid to families into their state’s social safety net is a worthwhile endeavor. And if they succeed, it could set the stage for more states to consider similar proposals in the future.
