The expanded child tax credit is set to expire in December absent an extension of the program. (Getty Images)
Nevada could see child poverty reduced by 41% if expansions to the child tax credit were made permanent, according to a new analysis by the Urban Institute.
Data has shown the child tax credit plays a major role in reducing child poverty for low income families, and its expansion under the American Rescue Plan Act has provided a glimpse of the credit’s potential to lift many more children out of poverty.
Using the supplemental poverty measure, researchers from the Urban Institute found a permanent expansion of the child tax credit would reduce child poverty nationwide by more than 40% in a typical year, meaning 4.3 million fewer children would be in poverty.
In Nevada, continuing the expanded credit beyond 2021 would reduce child poverty to 9.2% from 15.7%, a fall of roughly 41%, according to the analysis, lifting 44,000 children out of poverty.
In all but three states — California, Florida and Texas — the benefit would bring the child poverty level below 10%. In 11 states, a continued child tax credit would reduce child poverty by 50%.
Several states with more children living near the poverty line would see declines greater than 50%, including Wyoming, Louisiana and Mississippi, as well as Washington, D.C.
However, even in states where a permanent expansion would not reduce child poverty below 10%, the credit would have a significant impact. In California, the state with the lowest potential decline at about 33%, the benefit would still bring more than 600,000 kids above the poverty line, more than in any other state.
More than 590,000 children in Nevada already benefited from expanded child tax credit payments in August, according to data released by the U.S. Treasury and Internal Revenue Service. That follows the $143 million distributed to Nevada families in July, the first month the program was up and running,
About $15 billion in advance child tax credit money was distributed to roughly 61 million children nationwide in August. In Nevada, more than $154 million was distributed to 354,000 families, representing 594,000 eligible children. That follows the $143 million distributed to Nevada families in July, the first month the program was up and running.
The average child tax credit payment received per qualifying family was $435 in Nevada last month, according to the Treasury. That was slightly more than the national average payment of $428.
For 2021, the child tax credit was expanded from $2,000 per child to $3,600 per child under 6 and $3,000 per child 6 and older. Half of the expanded child tax credit is being distributed via advance monthly payments of $250 or $300 per child. Those direct deposit payments and checks are set to continue through December.
The remaining half will be paid in a lump sum when families file their 2021 taxes next spring.
The American Rescue Plan also made the child tax credit fully refundable, meaning previously ineligible low-income families can now benefit.
According to Census Bureau’s Household Pulse Survey data, parents reported having less trouble covering the costs of food and other household expenses after receiving their first benefit payment. If the child tax credit is not expanded beyond 2021, the reductions seen in poverty and food instability would likely reverse.
The Biden administration has proposed continuing the child tax credit expansion through 2025, while other Democrats have argued for making it permanent.
President Joe Biden included an expansion of the credit in the administration’s $3.5 trillion budget plan. However, the plan is currently facing opposition from conservative Senate Democrats Joe Manchin of West Virginia and Kyrsten Sinema of Arizona.
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