This tax season, countless American parents will be waiting to receive their Child Tax Credit. They’ll use it to pay rent or other big bills, just like my husband and I plan to do. It’s welcome extra cash that can provide a cushion for emergencies or simply help cover the many everyday expenses that come with raising children.
Even for middle class families, getting by in Colorado is getting tough. When asked by the Colorado Health Foundation, Coloradans said their top concern is the rising cost of living.
A two-parent family with an infant and a preschooler living in the Denver metro area must earn $9,995 a month to meet their basic needs, and tax credits play an important role in covering those expenses.
Tax credits and the tax code itself are critical parts of the social safety net. They are proven strategies to help stabilize families financially and, for recipients of the Earned Income Tax Credit (EITC), significantly lower the rate of childhood poverty. That’s exactly why these tax credits were created. However, 28% of eligible Colorado families do not claim the EITC and, nationally, the families of 2.3 million children did not receive the expanded Child Tax Credit they were eligible to receive during the pandemic.
When it comes to public benefits — programs like SNAP, cash assistance or Medicaid — more than $60 billion goes unclaimed each year in the U.S. This is especially troubling because researchers at the Urban Institute have crunched the numbers and found that full participation in and full funding of benefits could dramatically reduce poverty.