Poster #47 - Exploring the Impact of State Child Tax Credit Design on Racial and Ethnic Disparities in Eligibility

• In Event: Saturday Poster Luncheon

Abstract

Before 2021, the design of the federal child tax credit (CTC) disproportionately excluded Black and Hispanic children. When the federal CTC was temporarily expanded under the American Rescue Plan Act and became fully refundable, many families who were previously excluded were newly able to benefit from it. In recent years, several state legislatures have adopted new CTCs or amended existing ones, although these policies vary substantially from state to state in how they are designed and who they are targeted to benefit. Two design features of particular interest in determining which children are able to benefit from a state’s child tax credit are (1) the full refundability of the credit and (2) the inclusion of noncitizen children by allowing use of an Individual Taxpayer Identification Number (ITIN) to claim the credit. In this analysis, we use 2018-2022 5-year data from the American Community Survey (ACS) for seven states with fully refundable, ITIN-inclusive CTCs and three states with non-refundable CTCs that do not allow the use of ITINs. We estimate the racial and ethnic distribution of children who would likely be newly included or newly excluded from eligibility for each state’s CTC when comparing current CTC policy in a state to counterfactual scenarios that vary on refundability, ITIN inclusion, or both. While the ACS variables used for this analysis do not allow precise estimates of these changes, results of this analysis remain useful to enhance broad understanding of the implications of state child tax credit design on racial equity in anti-poverty policy. 

Author

• Erin Young, Portland State University
  Presenting Author