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- The United States federal child tax credit (CTC) is a partially-refundable tax credit for parents with dependent children. It provides $2,000 in tax relief per qualifying child, with up to $1,400 of that refundable (subject to a refundability threshold and phase-in). In 2021, following the passage of the American Rescue Plan Act of 2021, it was temporarily raised to $3,600 per child under the age of 6 and $3,000 per child between the ages of 6 and 17; it was also made fully-refundable and half was paid out as monthly benefits. The CTC is scheduled to revert to a $1,000 credit after 2025. The CTC was estimated to have lifted about 3 million children out of poverty in 2016. In 2021, a Columbia University study estimated that the expansion of the CTC in the American Rescue Plan Act reduced child poverty by an additional 26%, and would have decreased child poverty by an additional 40% had all eligible households claimed the credit. The expansion also substantially reduced food insufficiency. Research indicates that cash transfers to families, like the refundable portion of the CTC, leads to improved math and reading test scores, a higher likelihood of high school graduation, higher college attendance, and long-term increases in income for both parents and children. Studies have also determined that the CTC increases labor force participation among low-income parents. The CTC was created in 1997 as part of the Taxpayer Relief Act of 1997. Initially a small $500 per child nonrefundable credit, it was progressively made larger and extended to more taxpayers through subsequent legislation. In particular, it was temporarily raised to $1,000 per child and made refundable, subject to a phase-in, by the Jobs and Growth Tax Relief Reconciliation Act of 2003; that raise was made permanent by the American Taxpayer Relief Act of 2012; the credit was temporarily raised to $2,000 per child, with up to $1,400 of that refundable, and the number of taxpayers eligible substantially expanded by the Tax Cuts and Jobs Act of 2017; and finally the credit was expanded substantially and made fully available to very low-income people for one year by the American Rescue Plan Act of 2021. (en)
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- The United States federal child tax credit (CTC) is a partially-refundable tax credit for parents with dependent children. It provides $2,000 in tax relief per qualifying child, with up to $1,400 of that refundable (subject to a refundability threshold and phase-in). In 2021, following the passage of the American Rescue Plan Act of 2021, it was temporarily raised to $3,600 per child under the age of 6 and $3,000 per child between the ages of 6 and 17; it was also made fully-refundable and half was paid out as monthly benefits. The CTC is scheduled to revert to a $1,000 credit after 2025. (en)
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