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Child Tax Credit providing critical help, but not reaching more than 1 in 10 eligible families

Contact: Mara Ostfeld, 215-459-7850, mostfeld@umich.edu
Jared Wadley, 734-936-7819, jwadley@umich.edu 

ANN ARBOR—While most eligible families received the Child Tax Credit and used it to cover the costs of essential household expenses, a new survey indicates that more than 1 in 10 CTC-eligible families have not received the credit and were either uncertain about how to claim it or did not know why they did not receive it.

In March, Congress expanded the Child Tax Credit (CTC) to provide low- and middle-income families with monthly payments of $300 per child under 6 and $250 per child ages 6-17. The expanded CTC is already estimated to have reduced child poverty by about 30%. 

Poverty Solutions at the University of Michigan, in partnership with Propel, surveyed  low-income parents who use the Providers application—a free mobile app that helps more than 5 million families manage their Supplemental Nutrition Assistance Program benefits—and found that more than three-quarters of CTC-eligible users either received the Child Tax Credit payment (68%), were still expecting their first payment (4%), or understood why they did not receive an initial payment (11%). 

However, about 13% of CTC-eligible users reported they didn’t get the credit and were either unfamiliar with the CTC or the process by which they would receive it.

Among users of the Providers application, parents who took the survey in Spanish stood out as notably less likely to say they received the initial CTC payment, compared to those who took the survey in English. Just over half of parents who took the survey in Spanish indicated they had received their first payment, compared to more than two-thirds of parents who took the survey in English. Spanish-dominant parents were also less likely to have heard of the CTC. Five percent of parents who took the survey in Spanish reported not having heard of the CTC, compared with only 2% of those who took the survey in English.

RelatedThe Child Tax Credit: What You Need to Know, with FAQs in Spanish

Additionally, parents with fewer years of formal education are less likely to have received the August CTC payment. Parents who did not have a high school diploma were 13 percentage points less likely to have received the credit in August than those who had an associate degree or more education.

“The expanded Child Tax Credit clearly provides essential support to families. This support will almost certainly produce long-term benefits to children and in particular children in lower-income households,” said Natasha Pilkauskas, co-author of the policy brief “Receipt and Usage of Child Tax Credit Payments among Low-Income Families: What we know” and associate professor of public policy at U-M’s Gerald R. Ford School of Public Policy. 

“Yet it is important that we take additional steps to ensure the CTC is reaching and supporting all eligible children and families who can benefit from this important investment.”

Among those users of the Providers application who did receive the CTC, almost everyone reported that it was useful in helping them make ends meet (94%) and that it is important to continue the CTC in the future (92%). The vast majority of respondents who received the CTC reported using the money for basic living expenses like paying bills (75%), paying rent/mortgage (9%), paying off debt (4%) and buying food (7%). 

A large share of respondents (42%) also reported using the money for child-related expenses, like school supplies, children’s clothing and child care. Importantly, however, 16% of respondents reported the initial CTC payment did not provide enough help. 

Data from the U.S. Census Bureau’s Household Pulse Survey, which polls a nationally representative sample of U.S. households, showed a 30% decline in food insufficiency among adults with children following the initial monthly payments and a 43% decline in food insufficiency among low-income households that received the initial payment. 

“We can see in the data the ways in which these payments are impacting families across the country: helping them pay for food, bills, and other household expenses,” said Patrick Cooney, assistant director of policy impact at Poverty Solutions and co-author of the policy brief. “But we can also see that there’s more work to do to ensure all eligible families receive this critical benefit.”

This survey was conducted in collaboration with Propel, the creators of Providers (formerly Fresh EBT), between Sept. 1 and 15, 2021. The analyses in this report reflect the views of over 3,000 U.S. parents living with children under 18 that use the Providers application.