Sixth Child Tax Credit Payment Kept 3.7 Million Children Out of Poverty in December

The American Rescue Plan made important changes to the Child Tax Credit for 2021 by increasing benefit levels, expanding access to reach children in families with the lowest incomes, and paying the benefit out in monthly installments. We have been tracking the poverty impacts of these policy changes monthly.

Findings

• The Child Tax Credit reached 61.2 million children in December 2021, an increase of 2 million children over six months from the rollout to 59.3 million children in July. 

• Increasing coverage increased its anti-poverty effects: the first payment kept 3 million children from poverty in July and the sixth Child Tax Credit payment kept 3.7 million children from poverty in December.

• On its own, the Child Tax Credit reduced monthly child poverty by close to 30 percent.

• In absence of a January payment, the monthly child poverty rate could potentially increase from 12.1 percent to at least 17.1 percent—the highest monthly child poverty rate since December 2020.

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Measuring Monthly Poverty 

In 2020, we established a novel method of forecasting poverty to provide monthly projections of poverty using the Supplemental Poverty Measure. Using a monthly framework, we are able to track poverty amidst changing economic circumstances as the COVID-19 pandemic and federal policy responses continue to unfold. Visit our data page to see monthly poverty trends for the US population as a whole, as well as by race/ethnicity and age groups.