A child sitting at a round table, napping. Photo by RDNE Stock project is licensed under CC BY 2.0 via pexels.

Related piece originally published February 17, 2022.

The impact of COVID-19 on parents and children has forced us to reconsider how the U.S. approaches traditional welfare supports. A major change that parents saw in July 2021 under the American Rescue Plan Act (ARPA) was the increase in value of their child tax credit (CTC) and a monthly payout of half that child CTC – with $300 paid for each child under 6 years and $250 paid for each child 6-17 years each month. Furthermore, the threshold for receiving the CTC was considerably raised – temporarily lifting millions of children above the poverty line. ‘Incrementally revolutionary’ for social welfare in the U.S., the extension and expansion of the CTC had the potential to strengthen the social safety net and have a broad social impact, but was phased out (as of July 2025).

Then in 2025, the “Big Beautiful Bill” (BBB) introduced an increase from $2,000 to $2,200 – of which $1,700 is refundable and will increase with inflation. Additionally, one parent must also have a work authorized Social Security Number, which is a new condition for being eligible to receive the CTC. In addition to the CTC, the BBB also introduced new legislation intended to encourage Americans to have children, such as the Trump Child Savings Accounts.

Largely in response to unsustainable, dropping birth rates, new policies will be needed to continue to address this ticking time bomb. But while it is uncertain if the CTC increases the birth rate, we do know that CTC have a number of other positive impacts on children and families.

CTC’s History and Impacts on Children

Passed into law with bipartisan support in 1997, the CTC originally served as a tax break to middle class taxpayers. In 2001 and then 2008 the CTC was then made refundable and more accessible to lower income families.  Since the passage of the ARPA in 2021, the CTC is now more accessible and relatively generous than many other forms of welfare.

In measuring the social impact of the CTC, researchers have published ample evidence of this worthwhile investment. A nation-wide study found that when parents received the CTC their children were less likely to be physically injured and had less behavioral problems. Because children living in poverty are up to nine times more likely to fall victim to maltreatment and suffer from poor overall health, the CTC provides additional economic stability to lower-income parents. 

International programs similar to the CTC have found that increased payments were associated with lower levels of ADHD, physical aggression, maternal depression, and better emotional/anxiety scores among children. Experts in the U.S. have predicted that an increased investment in the CTC would have similar individual and social health impacts, remove millions of impoverished children out of poverty, and save billions of dollars in future.