The Center for Budget and Policy Priorities (CBPP), an American think tank that analyzes the impact of federal and state government budget policies, is calling on legislators to expand the Child Tax Credit for more children living in rural areas.
According to the CBPP, under current law, approximately 3 million children (the 17 % of whom are Latino) who live in rural areas are left out of the $2 Child Tax Credit, because their family income is too low.
“Rural communities would benefit disproportionately from an expansion that makes the credit fully available to children in low-income families who currently receive less than the full amount or no credit. This crucial investment in children living in rural areas, which includes children of diverse racial and ethnic backgrounds, should be a bipartisan priority during the year-end tax negotiations,” the CBPP says in a statement.
Additional income, such as an expanded child tax credit, can improve health, children’s education and economic outcomes. But the design of the credit leaves rural (non-metropolitan) communities at a disadvantage.
According to the CBPP, approximately 1 in 3 children under the age of 15 years living in rural areas receive less than the full credit because their family income is too low, while 1 in 4 children living in metropolitan areas do not receive the full credit.
Children in families with higher incomes (up to $400,000 in single-parent households and up to $400,15 in single-parent households married) receive the full value of the Child Tax Credit, while many children in families with low or no income are denied part or all of the credit.
The CBPP states that “If Congress allows low-income families to receive the full amount of the credit (known as making the credit ‘fully refundable’), e’), the resulting increase in income would help many families in rural communities provide more financial security for their children, including putting food on the table and paying rent and utilities.”
The Center notes that children of all races and ethnicities in rural communities have an interest in Congress expanding the Child Tax Credit, because of the approximately 3 million children living in rural communities who are currently excluded from the full credit, about 17% are White, 17% are African-American, 18% are Latino, 7% are American Indian or Alaska Native (AIAN), less than 1% are Asian, and 4% are other or multiple races.
For each of these groups, a higher proportion of rural than metropolitan children are left out of the total credit because their family income is too low. That is, white children living in rural areas are more likely to miss out on full credit than white children living in metropolitan areas, as are African American, Latino, AIAN, and Asian children living in rural areas.
Finally, the CBPP states that “The The current Child Tax Credit defrauds 1 in 3 children living in rural communities. Lawmakers should come together to expand the Child Tax Credit in year-end legislation, especially for children in low-income families who are currently denied the full credit.”
You are also may be of interest:
– Three tax credits you can claim from the IRS if you are not required to file taxes