"Analysis of Full Refundability of the Child Tax Credit Without Expansion" covered in Huffpost, CNBC
Recent microsimulation work on the Child Tax Credit by Jack Landry and Stephen Nuñez was featured in Huffpost and CNBC. The report examines the impact of full refundability–a provision which means that families do not need to report earned income to receive the credit.
The expansion of the full credit from $2,000 to $3,600 per year per child, with advance monthly distribution, expires after one year ― but “full refundability” would be permanent under the legislation. That means that even if Congress let the advance payments and extra $1,600 lapse, low-income parents could still receive lump-sum checks worth $2,000 per child after they file their taxes.
Just keeping full refundability, all by itself, would cut child poverty 19% on an annual basis, according to an analysis by the Jain Family Institute. Full refundability plus the extra money cuts poverty 40%.
“The key to the child tax credit is making it fully refundable,” said Stephen Nuñez, the lead researcher on guaranteed income at Jain and co-author of the paper. “So that money isn’t gated behind what happens in the labor force in any given year for parents.”
“Full refundability is especially important for those that are the most vulnerable children in the lowest-income families,” said Jack Landry, a fellow in guaranteed income at the Jain Family Institute and co-author of the paper.