Child Tax Credit

THE CHILD TAX CREDIT EXPANSION

Senator Michael Bennet’s floor speech celebrating a stronger Child Tax Credit (March 2021) 
  

As the Superintendent of Denver Public Schools, Michael Bennet saw every day how growing up in poverty shapes a child’s future in ways that are deeply unfair. That’s why Michael has been a tireless advocate for expanding the Child Tax Credit for several years.

Following his appointment to the Senate, Michael voted in favor of The American Recovery and Reinvestment Act of 2009 to increase the Child Tax Credit for low-income families— a major step in improving the refundability of the credit.

He built on these improvements in 2015 by introducing the Child Tax Credit Improvement Act, a bill aimed at updating and modernizing the Child Tax Credit for middle-class and low-income families. This bill sought to increase the credit for families with young children, enable taxpayers to receive the refundable portion of the child tax credit for every dollar earned, and index the amount of the credit for inflation, which would ensure that the credit retained its value over time.

In 2017, Michael introduced the American Family Act with U.S. Senator Sherrod Brown (D-Ohio) to overhaul the existing Child Tax Credit and create a new $300 per-month, per-child credit for children under 6 years of age and a $250 per-month, per-child credit for children 6 to 17 years of age, and for the first time providing low-income families the full credit while delivering payments on a monthly basis.

In 2021, Bennet worked with the Biden Administration to enact a one-year expansion of the Child Tax Credit – based on his American Family Act– in the American Rescue Plan that President Joe Biden signed into law. This expansion cut child poverty nearly in half and hunger for families by a quarter in 2021, benefitted 90 percent of Colorado children, and lifted nearly 3 million children out of poverty nationwide.  

Despite being one of the wealthiest nations in the world, the United States has the fourth highest child poverty rate in the industrialized world. Michael believes that is unacceptable. Michael continues to work with the Biden Administration and his colleagues in Congress to make the Child Tax Credit expansion permanent, including  refusing to enact corporate tax cuts without expanding the Child Tax Credit.

How Does Michael Bennet’s Child Tax Credit Expansion Work?

Bennet’s American Family Act provides relief to families who need it the most. This legislation expands the Child Tax Credit in three primary ways:

1. It increases the credit’s value to $3,600 per child age 0 to 5 and $3,000 per child age 6 and older, and expands eligibility to families with children age 17.
 
2. It makes the Child Tax Credit fully refundable and eliminates its minimum earnings requirement. Currently, if you owe little or no federal income tax, you are unable to get the full (or any) credit. The American Family Act expands the credit to all low- and middle-income families who were previously left.
 
3. Currently, a family receives the credit once a year. Bennet’s American Family Act allows families to receive the credit in advance periodic payments to make ends meet month-to-month.
 

The Child Tax Credit In Effect

In 2021, Bennet’s expanded Child Tax Credit cut child poverty nearly in half— from 9.7 percent to 5.2 percent, a record low. Specifically, the expanded Child Tax Credit lifted 5.3 million people, including 2.9 million children, out of poverty. It reduced child poverty rates for nearly 10 million kids and shrank racial disparities.

In Colorado, the expanded Child Tax Credit lifted 57,000 kids out of poverty and benefitted more than 1 million kids statewide, including nearly 350,000 kids who have been left out of the full existing credit.

The Child Tax Credit expansion benefited 96% of families with kids—including more than 96% of families with kids in Colorado. Nationally, 94% of kids living in rural areas benefited, along with 93% of kids in Colorado’s rural communities.

The expanded Child Tax Credit was successful at reducing hunger with the food insufficiency rate for families with children dropping 24 percent after the first payment in July 2021. The five most common uses of the first two Child Tax Credit payments were food, essential bills, clothing, housing costs, and school expenses.

Hear From Coloradans

Ahead of the president’s Joint Address in April 2021, Michael had a conversation with Ambrosia Berg, a single mom from Boulder who benefitted from the one-year Child Tax Credit expansion passed in the American Rescue Plan.
“From personal experience, I know that families living in poverty already face so many challenges. So for me, the expansion of the Child Tax Credit means that my family will have more of a stepping stone to get ahead in a ‘just getting by’ world. [The expanded Child Tax Credit] would help me provide the essentials like food, housing, and reliable transportation while also helping me maintain a nurturing environment for my son to develop into a successful member of the community.” - Ambrosia Berg
 
 

Listen to other Coloradans on the impact of the enhanced Child Tax Credit:

Sarah Barnes (Manager of Special Policy Initiatives, Colorado Children’s Campaign): “The Colorado Children’s Campaign believes the Child Tax Credit has been and continues to be one of the most vital tools we have to ensure Colorado families are financially secure. The pandemic has continued to force many families into poverty. Expanding the Child Tax Credit is a proven solution to a problem that impacts all Coloradans. Ensuring the Child Tax Credit is fully refundable guarantees that the lowest-income families get critical support, which could mark a historic achievement of cutting child poverty in half. We thank Senator Bennet for his efforts to support those who are the furthest from opportunity.”

Robyn Boyles (a new mom and MomsRising member from Longmont): “Financial relief is so crucial for families like mine right now. My husband and I lost our jobs in the restaurant industry when the pandemic hit, shortly after that we found out we were pregnant with our first child. My husband and I are back at work but only part-time, so we are struggling to cover the basics and dig ourselves out of the debt that has piled up because of the pandemic. It’s so stressful to worry about making ends meet as I recover from birth and balance having a newborn. That’s why I’m so excited about the expansion of the Child Tax Credit. The extra money will mean so much to my family and it’s a huge relief. It will help us stay on top of our bills, cover the basics, and have reliable transportation to and from work.”

Fátima Alhexia Boylen (owner of Boylen Cleaning Services): “Expanding the Child Tax Credit will give me the flexibility to continue to grow my cleaning business and provide for my family at the same time. I can’t thank Senator Bennet enough for his efforts to get this included in the American Rescue Plan to support my family and so many other kids and families in Denver and across Colorado. This will benefit over one million kids statewide. Now Senator Bennet must fight to make the expansion of the tax credit permanent.”

Elyssa Schmier (National Director, National Budget and Taxes, MomsRising): “Costs associated with raising children are now one of the biggest barriers for upward economic mobility. Senator Bennet’s successful push for an expanded Child Tax Credit in the Biden American Rescue Plan will be a lifeline for families and kids in Colorado and across the country.”

Support

Colorado Organizations

The following Colorado organizations have endorsed the American Family Act: Early Learning Ventures, Early Childhood Council Leadership Alliance, Colorado Children’s Campaign, Colorado Fiscal Institute, United for a New Economy, The Bell Policy Center, Stand for Children Colorado, Community Partnership for Child Development, Peak Vista Community Health Centers, Catholic Charities of Central Colorado, Mesa County Partnership for Children and Families, and Family & Intercultural Resource Center

National Organizations

The following organizations have endorsed the American Family Act: Center for American Progress, Center on Budget and Policy Priorities, Center for Law and Social Policy, Child Care Aware of America, Children’s Defense Fund, Community Change Action, Economic Security Project, First Focus, MomsRising, National Association for the Education of Young Children, National Women’s Law Center, Niskanen Center, Service Employees International Union, Zero to Three, Child Welfare League of America, Public Advocacy for Kids, and Every Child Matters.