Putting the “Child” in Front of Tax CreditLeave a Comment
Few tax policies are conditional on providing for the needs of children or ensuring that refunds are distributed based on the number of children in a home. It’s been a difficult time to be a parent and just this past November, 44% of families in Virginia indicated they had a hard time affording their typical household expenses. It’s heartbreaking to hear from a parent who is stressed about keeping food on the table or a roof over their heads. And it’s detrimental to our society when we can’t provide children economic security, impacting our children’s brains and their growth and development.
It’s time for Virginia to create a tax credit for parents and guardians who have children under 18 in their homes. This year Senator Jennifer McClellan, Senator Adam Ebbin and Delegate Kathy Tran have filed a Child Tax Credit (HB2205/SB1324) that would be available to all households in Virginia who claim dependents on their taxes and earn under $100,000 per year. The household would be eligible for $500 per child in a refund of their tax dollars.
Virginia families are battling inflation and continued economic uncertainty. We are reaching the end of COVID relief, yet for many families that “end” does not bring certainty or stability in their economic health or their children’s physical health and well-being.
But we have a tool that we know works. The expanded Child Tax Credit provided as COVID relief changed the trajectory of childhood poverty. The expanded Child Tax Credit helped to bring childhood poverty to a record low. Virginia’s supplemental poverty measure declined to 9% in 2021. Families receiving the credit used it to help put food on the table and pay their basic utilities.
More than half of families survey reported using the expanded Child Tax Credit for food, followed by a third who used the money to pay bills.
A refund of $500 per child can help afford a month of groceries, a thousand diapers or a security deposit on a new apartment.
As lawmakers weigh tax refund proposals, a Child Tax Credit should rise to the top because it can provide resources to families at a time in children’s lives when they need it most. Researchers have identified how the stresses of living in poverty can impact the hardwire of children’s brains and create future mental health concerns and academic challenges. As lawmakers consider various ways schools and communities can help reverse the impact of the pandemic on children, providing tax relief back to their parents is a clear win. In 2022 several states enacted refundable Child Tax Credits or one-time relief to prioritize families and impact this life course including Vermont and New Mexico. Virginia is in a fortunate position to have strong tax revenues again this year. The commonwealth should create a Child Tax Credit to support strong families.