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Report: Thousands of Arkansas families ineligible for full child tax credit

by Alex Thomas | December 6, 2022 at 9:14 a.m.
The Arkansas flag is shown in this file photo.

WASHINGTON -- Around 223,000 Arkansas children -- including nearly four in 10 children in rural communities -- live with families whose incomes are too low for the full federal child tax credit, according to a new analysis.

These children are some of the 19 million children nationwide whose families do not make enough for the entire amount.

The Center on Budget and Policy Priorities, a research institute based in Washington, D.C., released its findings last month. The organization describes itself as a nonpartisan think-tank, and prioritizes policies addressing socioeconomic issues and systemic barriers to services.

Families can get up to $2,000 per child through the current child tax credit. The amount is dependent on a family's income and tax liabilities.

"As the credit is currently designed, the design is really backwards," Sarah Calame, a research assistant with the Center on Budget and Policy Priorities' federal fiscal policy team, told the Arkansas Democrat-Gazette.

"What that really means in practice is that many families with lower incomes get a smaller credit compared to families with much higher incomes. That really means the kids who could benefit the most from this money are left out of the full credit."

Of the 223,000 Arkansas children unable to receive the full child tax credit, 95,000 children reside in rural communities. Arkansas outpaces the national rate regarding rural children in this condition; 39% of rural Arkansas children are left out of the child tax credit compared to 32% of children in rural areas nationwide. Around 30% of Arkansas children living in metro areas are part of families ineligible for the full tax credit.

Around 48% of Arkansas children in this position are white compared to 27.8% of Black children in Arkansas and 15.9% of Latino children.

"Within each racial or ethnic group we look at in our report, we see a larger share of rural kids being left out than urban kids," Calame said. "When you look at Black kids nationwide, if they live in a rural community, they are more likely to be left out than Black kids in an urban community, for example."

Federal lawmakers temporarily expanded the child tax credit last year as part of the American Rescue Plan. Families were eligible to receive up to $3,000 per child between the ages of 6 and 17 and an additional $600 for each child younger than 6. Money was made available in monthly payments distributed from July through December 2021. Congress allowed the expansion to expire at the end of last year.

The U.S. Census Bureau released data in September showing a 46% decline in child poverty since 2020 in part because of the expanded child tax credit. The authors noted the increased child tax credit "significantly decreased the number of children experiencing poverty across several race and Hispanic origin groups."

"That's a tremendous policy success," Calame said.

Calame said lawmakers should consider reviewing the child tax credit to allow more families to qualify for the program.

"It's just frankly unfair that the kids [of families] with the lowest incomes are getting less help than kids with much higher incomes," she said.

"There's so many different factors that can affect how the policy influences people, but I think the overarching message is that the child tax credit could lift up so many kids in so many different backgrounds if it were expanded."

The Center on Budget and Policy Priorities has urged Congress to consider expanding the child tax credit before the end of the year. Legislators remain in the nation's capital to address multiple items before 2023, including a funding measure to prevent a government shutdown Dec. 16.


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