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<p>Unlike the universal child allowances available in many advanced democracies, the largest child-specific income benefit in the United States, the Child Tax Credit (CTC), is a function of tax liabilities and earnings. As a result, it disproportionately reaches middle- and high-income families and leaves many low-income families ineligible. This study examines, from its enactment through present day, how legislative changes to the federal Child Tax Credit’s key parameters—including refundability, the earnings requirement, and the maximum credit amount—have impacted the share of children eligible for the full credit (overall and by subgroup), and how full-credit eligibility relates to the credit’s impact on child poverty and bottom-tail income inequality, including whether these three metrics move in tandem. We find that, in all years except 2021, at least 19% of children—and often, substantially more—were ineligible for the full CTC because their families had low or moderate incomes. The sizeable variation in full-credit ineligibility across years resulted from legislative changes that widened and narrowed eligibility over time. Furthermore, the credit’s impact on child poverty and income inequality does not always move in the same direction, depending on the type of policy change. Reforms that increased the credit value without substantial expansions to refundability left more children ineligible for the full credit and increased income inequality. By contrast, refundability expansions broadened full-credit eligibility while reducing poverty and inequality. Impacts on child poverty and inequality were greatest when full refundability was paired with higher credit amounts.</p>

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How the U.S. child tax credit has benefited children over time: historical trends in eligibility, poverty, and income inequality

  • 期刊论文

  • 发表日期：

    2026年7月1日

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  • Sophie Collyer,
  • Megan Curran,
  • David Harris,
  • Christopher Yera

摘要

Unlike the universal child allowances available in many advanced democracies, the largest child-specific income benefit in the United States, the Child Tax Credit (CTC), is a function of tax liabilities and earnings. As a result, it disproportionately reaches middle- and high-income families and leaves many low-income families ineligible. This study examines, from its enactment through present day, how legislative changes to the federal Child Tax Credit’s key parameters—including refundability, the earnings requirement, and the maximum credit amount—have impacted the share of children eligible for the full credit (overall and by subgroup), and how full-credit eligibility relates to the credit’s impact on child poverty and bottom-tail income inequality, including whether these three metrics move in tandem. We find that, in all years except 2021, at least 19% of children—and often, substantially more—were ineligible for the full CTC because their families had low or moderate incomes. The sizeable variation in full-credit ineligibility across years resulted from legislative changes that widened and narrowed eligibility over time. Furthermore, the credit’s impact on child poverty and income inequality does not always move in the same direction, depending on the type of policy change. Reforms that increased the credit value without substantial expansions to refundability left more children ineligible for the full credit and increased income inequality. By contrast, refundability expansions broadened full-credit eligibility while reducing poverty and inequality. Impacts on child poverty and inequality were greatest when full refundability was paired with higher credit amounts.