Benefits Access and Equity

2.3 Million Low-Income Children are at Risk of Being Left out of the Child Tax Credit

06. 03. 2021

Equitable access to CTC portals is key to reaching the hard-to-reach

The Child Tax Credit promises to keep millions out of poverty with monthly payments of up to $300 per child, but the new portals must be made mobile-friendly and available in multiple languages to ensure the most vulnerable families can get it. Failure to do so could keep millions of eligible families from getting the monthly income boost. The portals also must be made permanent and government-run, to allow families to claim tax credits every year.

The CTC Only Reduces Poverty and Racial Gaps if Eligible Families Get It

The expanded CTC promises to dramatically cut poverty and reduce racial income gaps. The expanded monthly Child Tax Credit (CTC) is predicted to cut child poverty nearly in half by providing monthly checks to 92% of families with children – with greater income boosts and larger reductions in poverty for Black and Latinx families. But these results are only possible if families actually receive the money.

Those Most at Risk of Not Getting CTC Are Those Who Need It Most

Newly eligible families are those most at risk of not getting the CTC. Families that file taxes will automatically get monthly payments starting as early as July. But nonfilers, mostly people with very low incomes who need the CTC most, won’t unless they file taxes or use the new sign-up portal provided by the IRS. At least 2.3 million eligible children live in households that don’t file taxes and are at risk of missing their CTC. Providing a better way to claim the CTC is a matter of equity. What we know from other tax credits like the EITC is that people of color are most at risk of missing out, specifically people who: live in areas with a high concentration of Latinx people; are Native Americans; participate in food stamp programs; and have a language other than English as their first language.

Research in California finds that 1 in 4 low-income safety-net recipients – 2.2 million people – were eligible but missed out on the stimulus checks, because they don’t file taxes. And while 2/3 were single people without dependents, approximately 732,600 people were in households with dependents. Those same families are at risk of losing their CTC, as well. 

Immigrant children are explicitly excluded. In addition to administration challenges, kids who lack SSNs are excluded from the CTC due to changes enacted in the 2017 TCJA. Not only is this exclusion unjust, public charge and other anti-immigrant policies enacted during the last administration have created a chilling effect that keeps even eligible families from accessing benefits for fear of repercussions based on immigration status.

By the Numbers
  • 36M households will begin receiving monthly advance CTC payments automatically in July because they file their taxes. 
  • At least 2.3M children live in households that don’t file taxes and risk being excluded without better access to the Portal.

Sign-up Portal is the First Step Toward Full Access, but It Must Be Mobile-friendly, in Multiple Languages, and Permanent

The IRS has committed to automatically sending monthly checks to tax filers starting July 15. For nonfilers, it has opened a new online claiming portal, which eligible families can  use in order to get their monthly CTC payments this year. The original EIP portal was a fillable PDF, nearly impossible to complete on a smartphone, and was available only in English and Spanish. Only about half of those eligible used the EIP nonfiler Portal.

Many nonfilers – 27% of people who earn $30K or less – don’t have broadband at home and can only access the internet through their phones, so the portal must be made mobile-friendly. It should also be made available in multiple languages. Finally, the portals should be made permanent, government- owned tools that allow people to claim tax credits every year.